Selling a Patent, Copyright, or Trademark

By: Heleigh Bostwick 

Patents, trademarks, and copyrights are all forms of intellectual property and just like any other property, intellectual property can be bought, sold, inherited, or otherwise transferred.

Inventors, authors, and artists may prefer to focus on creation and leave the work of licensing and monitoring to someone else. Selling intellectual property can be a great way to generate income, but it's also important to consider the consequences of choosing a one-time sale profit over the ongoing profit potential of licensing.

Considering selling your intellectual property? Here's what you need to know about selling the rights to that patent, trademark, or copyright.

Selling a Patent

A patent indicates that the inventor (or patent owner) now has the right to make, use, import, sell, and offer for sale the invention for up to 20 years (the length of time that the patent is valid). Inventors should be aware that the patent itself won't generate an income for the inventor, but licensing or selling the patent rights to another person or company will. Of course, whether it's a new product or a new technology, there's no guarantee that an inventor will get rich off of the invention.

Selling a patent outright can generate a lump sum of money for an inventor, but the downside is that by selling the patent, the rights to any future income are transferred to the new owner of the patent. Inventors must also consider the timing and the type of product. Say the patent is for a new technology, but it hasn't caught on yet. By selling the patent later, once the technology gets established and is at least moderately successful, the inventor can sell the patent for more money than when it was first issued.

Many inventors opt to take the licensing route because in the long run it can be more profitable. Again though, success is not guaranteed because an inventor never knows which product or technology is going to become profitable. In the case of licensing, most inventors grant an exclusive license to a single company to manufacture the product or use the technology. The inventor retains the patent rights and receives royalty checks.

Selling a Trademark

Trademarks, as defined by the USPTO, protect words, names, symbols, sounds, or colors that distinguish goods and services. A trademark can be renewed in perpetuity as long as it is associated with the same goods and services. Unlike patents, trademarks are associated with a product or a business and are not sold outright. Trademark ownership can be transferred along with ownership of the business or product the trademark represents. For example, if you sell your business, you may sell the trademark rights to the logo along with it.

Trademarks may be licensed, but the owner of the trademark is responsible for ensuring that the goods or services carrying the mark meet the standards expected of the mark. If the licensor doesn't monitor the quality of the items carrying the mark, the trademark may be deemed abandoned, and therefore unenforceable.

Selling a Copyright

Copyright protects the rights of authorship of literary, artistic, and musical works that have been tangibly expressed (i.e., written). A US copyright may be sold or transferred as long as the transfer is in writing and signed by the party relinquishing ownership. However, a copyright is rarely sold outright; more often it is transferred as part of a business agreement.

Musicians may assign copyright ownership to a record company in exchange for production and marketing as part of a recording contract. In "work for hire" situations, where someone is paid to produce a specific work, the hiring body (rather than the creator) usually owns the copyright of the produced work. Depending on the agreement, the author may or may not retain authorship, but gives up rights to reprint or reproduce the work, eliminating profit beyond the initial fee paid to produce the work.

Selling a work or a copy of the work usually doesn't transfer copyright. An author or artist retains copyright to a book or painting even if the item itself is sold. The purchaser may sell the specific copy he or she owns, but the author or artist retains the right to reproduce, replicate, and license the work for other uses.

In order to get exposure for their works without giving up ownership rights, authors, photographers, and artists sometimes use what is called a Creative Commons License that allows others to use the works without a fee as long as certain conditions are met.

Source >>

How to Get a Patent

By: Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

How to Get a Patent
How to get a Patent? That’s a good question! The short and long answers are below.

The short answer is : In the US, file a US Utility Patent Application, or a US Design Patent Application. Note that a US Provisional Patent Application does not become a US Patent, but does give “patent pending” status.

And, do you need a US Patent Attorney? Yes and No. In theory, a patent application can be filed by the inventor. Due to the great number of legal technicalities and chances of losing rights by use of poor legal language or by failing to add the right legal language, most authorities believe it is by far the best course of action to have a US Patent Attorney prepare the patent application. Some very experienced inventors might prepare their own patent applications, although that is not common.

The longer answer is:

These are the basic steps for how to get a patent. For a Utility Patent, the goal is to get broad claims allowed by the US Patent Office, and which become part of an Issued Patent. The claims define the scope of what is legally protected by the issued patent.

The inventor should write a description of the invention, and make sketches or drawings which can show the invention. The description and drawings do not have to be very detailed, as long as they clearly explain what the inventor believes is new.

If working with a US Patent Attorney or US Patent Lawyer, something which is highly recommended, this information may be enough to start. The US Patent Attorney will then draft a more detailed version of the invention in the format required by the US Patent Office, referred to below as the USPTO (which is short for US Patent and Trademark Office).

What will the US Patent Attorney add to help the invention? Good question! The US Patent Attorney will provide the correct wording for various elements, and will provide a set of claims to set forth the legal rights proposed for the invention. Proper drafting of the specification and claims requires good knowledge of current laws and legal case decisions. It should include proper use of “means for” language which may need to be present in the claims and specification, and must be properly supported by an explanation of equivalent structures or functional elements. The US Patent Attorney can provide additional language to encompass or add features which would be known to anyone having skill in the art, in order to broaden the scope of the resulting claims.

The US Patent Attorney will send the draft application to the inventor for changes and additions. This draft application may go back and forth more than once, until the Inventor is satisfied with the draft application. At that point, the draft application is filed with the USPTO by the US Patent Attorney together with the necessary transmittal forms and legal forms.

The USPTO will send an Official Filing Receipt. After that, the USPTO will conduct a search of the prior art patents and other literature, and send an Official Action reporting the results of that search together with an explanation of any objections or rejections. The objections can be to the form or language used, including any objections to the drawings, specification, or claims. The rejections will be legally based, and can include rejections over prior art, as either “anticipated” or “obvious over” the prior art. Other rejections can include “non-operability” and “non-statutory” rejections. It is possible to respond to these objections and rejections, and in many cases these objections and rejections can be overcome by a proper response.

The US Patent Attorney can respond to any such official action received from the U.S. Patent Office. If the official action is a rejection, then a response will provide arguments in support of patentability and possibly changes to the claims. The response will also respond to any objections.

The rejections over the prior art can be overcome, when possible, by amending the claims to avoid the cited prior art, or by providing arguments in support of patentability. For example, a cited prior art patent might not work in exactly the same way as the invention, or it might not have equivalent structural or functional elements as the invention.

The USPTO will consider the Response filed by the US Patent Attorney.

Assuming the application is deemed patentable (the majority are), then a Notice of Allowance and Issue Fee Due is sent. Upon payment of the issue fee, a patent will issue.

It is that simple. This whole process can take anywhere from 12 months to 36 months, depending entirely on the U.S. Patent Examiner to which the application is officially assigned.

A more detailed explanation is as follows.


How To Get A Patent For Software In India

By: pagluchulkene

India’s GDP is a function of its export of Information Technology to the Western world, let us acknowledge it far and loud, for once. There are brilliant codes written, genius software developed, in large numbers, literally every day. Tonnes of money is spent on the research and development of each of this software and hence, there is a major need to safeguard these intellectual properties – yes, they are that! – which drive India’s growth in more ways than one.

In this article, we look at protecting the intellectual rights of a software, a much-underrated entity although it makes for some of the highest copyright infringements.
Computer-related inventions can be really tricky. Firstly, you have to describe the invention very cleanly such that it makes sense and that, let me say, is not an easy job, especially when it relates to computers and software – areas not easily comprehensible to laypersons.

It is still easy to define the functionality that is required by the customer, and if you have the required coding skills, you can even build a programme that fulfills the desired functionality, but – and there is a big but here – the area that has to be protected by a patent lies somewhere in between. It lies midway between the functionality that is desired and the code that is written to achieve it. This makes defining it all very difficult, especially for those who are new to the area of patenting.

Software Patenting
“How to patent a software” is a hot question amongst many tech entrepreneurs in India, and in this day and age, when our country is undergoing a major entrepreneurial boom, we need a convincing answer to that question.

Read More  >>

How Much Does A Patent Cost?

By: Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

How much does a patent cost?
We try to keep your costs as low as possible, and as affordable as possible. We provide flat fee estimates in advance, at no charge to you.

In the simplest cases, where the invention is easy to describe or show in a few figures of drawing, patent application can be prepared for as little as $1800, with a government filing fee of $540 for a small entity (this cost is slightly less for electronic filing).

The formal drawings, if needed, can usually be obtained for less than $150 per sheet. One sheet might have several figures on it, depending on the complexity of the invention, thus saving money.

If the patent application is granted, the government charges an issue fee of $755 and publication fee of $300. A service charge of $80 is added for attending to preparing and filing the Issue Fee Transmittal.

The U.S. Patent Office examines the patent application and finds any relevant prior art. If the prior art is sufficiently close, they will make a rejection. A response can be filed, usually at a cover of $350 to $450. Every case is different; some are allowed without needing such an amendment or response. In some cases, a further response is necessary or desirable, and the cost is normally somewhat less than $350.

This type of rejection is fairly normal. To attempt to overcome such a rejection, the response can be filed which changes the claims to avoid the prior art, and/or presents arguments to distinguish the invention in the patent application from the prior art.


When, why and how to launch your startup in secret

By: James McGrath 

When you’re building your startup, the first step is to tell everybody about it, right?

While there are thousands of startups out there trying to get the attention of the press and prospective customers, there are those that deliberately avoid the limelight.

Businesses like Domo and Rev have gone the unusual route of making people sign non-disclosure agreements before letting prospective customers and funders have a play around with their products.

It’s unusual for a company to launch in complete stealth mode, and with an interconnected ecosystem it’s kind of hard to do things in complete silence these days. So why would you want to keep your startup under wraps?

The main benefits
The benefits of launching in stealth mode can be broadly sorted into three categories:

It gives you the focus to work on version 1.0 of your product without distraction

It helps build an air of mystique around your company, especially if the founders are well known

It keeps IP and the industry problem you’re targeting away from the prying eyes of potential competitors

It basically allows you the time and space to work on your product with a select group of potential clients and collaborators to keep the feedback loop really tight.

It also allows you to launch with a fully realised product which surprises and delights rather than doesn’t meet the expectations of hype.

Of course, this approach has its down side

READ: What is a startup, seriously?

The drawbacks

Then again, trying to keep a lid on things could present these three problems:

You can’t build early brand momentum if you don’t tell anybody about it

It limits the number of investors, potential customers and other parties who can provide valuable feedback on early builds

People may see your insistence that people sign non-disclosure agreements (NDAs) as a sign of unearned paranoia

In a world where there are thousands of startups vying for attention, keeping silent about yours can seem like cutting off your nose to spite your face.

But some startups swear by the benefits of launching in secret — so what’s the best way to do it?

The tools you’ll need

Some startups that choose to launch in secret do so because they’re afraid of someone stealing their idea — which isn’t always unfounded.

But IP lawyer (and Pulse contributor) Blake Knowles told The Pulse that the simplest way to avert this fear is to file a patent, which if granted, gives you exclusivity in the market you filed the patent in.

Of course, that could potentially tip off a rival if they’re savvy enough to be looking at patent applications in their area.

Meanwhile, a standard NDA could prohibit third parties talking about your idea to help protect it — but again, it’s quite limiting.

“From an IP protection perspective, any activity that exposes your product is generally incompatible with protection of the IP in the product itself, unless a patent application has been filed, or disclosures are carefully made subject to confidentiality agreements,” said Knowles.

“However, NDAs can limit the momentum of the product, and not all products or services are patentable. Spending money on patent filings needs to be strategic.

“Unfortunately, there are no other real ‘tools’ available to entrepreneurs to protect rights in the product itself, if they want to start generating interest in the market.”

Raed More >>


By: Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

The US law provides for patent and trademark protection. The administrative agencies responsible for this are the US Patent Office and the US Trademark Office, which are combined and called the US Patent and Trademark Office, abbreviated as USPTO. In the following, the abbreviation USPTO will be used throughout.

Preparing a patent application
A US Patent Lawyer, also called a US Patent Attorney, normally prepares a US Patent Application for filing with the USPTO. The US Patent Lawyer works with the inventor to draft a specification having a description of the invention, including drawings when possible. The draft is then studied by the inventor, and changes are made if necessary. When the draft is accepted by the inventor, the inventor signs a form called a Declaration, claiming inventorship of the application. Once it is filed, it receives a Serial Number and an Official Filing Receipt, and thus becomes an official US Patent Application.

At some point in this process, it is advisable but not necessary to perform a US patent search. The US patent search can find prior art patents that show the extent of the closest prior art, and whether the invention has been patented at an earlier time. If an expired patent is discovered which is very close to the invention, then that expired patent can confer a “right to use” that invention. If a pending US Patent covers the invention, and has claims which are sufficiently broad to cover the invention, then it is possible that infringement would occur. It is important to know if a new product might infringe an existing unexpired US Patent. If no patent exists which covers the invention, then it is possible that the invention can be patented. As noted above, it is not necessary to conduct a patent search prior to filing a new patent application.

The Role of the USPTO in Examining the Patent Application
The US Patent Application is examined in due course by a patent examiner. The US patent examiner will be an expert in the particular art in which the invention resides. The US patent examiner will search the prior art patent literature, and will make a search report and send it to the inventor along with a first Office Action on the merits.

If an invention is finally rejected, that rejection can be appealed. In that case, it is taken up for review by a board of appellate examiners. Each appellate examiner is likely to be a USPTO Patent Attorney or USPTO Patent Lawyer. If the appeal is refused, it can be taken further to a US District Court, in which case the USPTO is represented by the Solicitor’s Office. In that case, the Solicitor in Court will be a USPTO Patent Lawyer or USPTO Patent Attorney. Such higher appeals are not frequent, but are more likely to occur when the invention is particularly valuable.

The Role of the US Patent Attorney in the Examination Process
The US Patent Attorney or US Patent Lawyer considers the Office Actions received from the USPTO, and transmit’s the Office Action to the inventor along with any advice or comments on how to respond. The US Patent Attorney or US Patent Lawyer then responds to the Office Action, usually by providing legal arguments in support of patentability.

If the Office Action is a Notice of Allowance, then the response by the US Patent Attorney or US Patent Lawyer simply transmits the Issue Fee Due along with a transmittal form required by the USPTO.

During this time, the inventor may be commercializing the invention. In this case, a successful invention might be licensed or assigned, or distribution agreements may be made. In all these cases, the US Patent Attorney or US Patent Lawyer performs an important role in making sure these agreements serve the interests of the inventor.

The Role of the US Patent Attorney or US Patent Lawyer after the Patent is Issued
Once the patent issues, it can be enforced against competitors. In that case, the US Patent Attorney or US Patent Lawyer normally first sends a warning letter to the infringing competitor. If the infringement continues and no licensing agreement or assignment agreement is reached, then a lawsuit can be filed by the US Patent Attorney or US Patent Lawyer in a US District Court or in a state court.

The filing of a lawsuit, and the defense of such a lawsuit, are usually referred to as US Patent Litigation, or simply Patent Litigation. Such lawsuits can be short or long, and many businesses with successful products consider it commercially economical to conduct Patent Litigation to protect their rights.

Foreign Entities
Foreign entities must be represented by an attorney or lawyer, in order to obtain a patent or trademark, and in order to maintain a lawsuit in the US. In a Trademark case, the US Patent Attorney or US Patent Lawyer can be appointed as the Domestic Representative of the foreign entity.

Preparing a Trademark Application
A US Trademark Lawyer, also called a US Trademark Attorney, normally prepares a US Trademark Application for filing with the USPTO. The US Trademark Lawyer works with the applicant to draft an application having a description of the goods/services together with a drawing showing the trademark. The draft is then studied by the applicant, and changes are made if necessary. When the draft is accepted by the applicant, the applicant signs a form called a Declaration, claiming ownership of the application. Once it is filed, it receives a Serial Number and an Official Filing Receipt, and thus becomes an official US Trademark Application.

At some point in this process, it is advisable but not necessary to perform a US trademark search. The US trademark search can find prior art trademarks that show the extent of the closest prior marks and whether the mark has been registered at an earlier time. If an expired trademark is discovered which is very close to the application, then that expired trademark might or might not mean the mark is available to other applicants. If a pending US Trademark Registration covers the mark and is in the same or similar field of goods as the applicant’s mark, then it is possible that infringement could occur. It is important to know if a product or service might infringe an existing unexpired US Trademark Registration. If no USPTO registration exists which covers the trademar, then it is possible that the trademark can be registered. As noted above, it is not necessary to conduct a trademark search prior to filing a new trademark application.


Pick the Right Intellectual Property Law Program

By: Ilana Kowarski

Intellectual property plays a critical role in American life. According to a U.S. Patent and Trademark Office report, IP industries account for more than 38 percent of the gross domestic product.

It's no surprise then that intellectual property law – which protects people's ownership claims to their ideas, inventions and works of art – is a growing field.

Intellectual property attorneys say their skills are in demand, and experts note there are opportunities to practice IP law within any industry that involves human creativity. This means a wide array of commercial legal jobs, particularly in the rapidly expanding high-tech sector, and jobs that involve international litigation to resolve the significant number of disputes between U.S. and international companies.

[Discover what a typical day is like for an intellectual property attorney.]

This legal field is likewise becoming more central to important U.S. policy disputes, IP attorneys say. Jon Kappes, a patent lawyer and lecturer at Arizona State University's Sandra Day O'Connor College of Law, says "IP law, particularly patent law but also copyright and trademark, has in recent years become one of the most dynamic areas of the law."

Kappes says congressional members regularly propose revisions to the nation's IP laws, and there are a growing number of Supreme Court cases on this topic.

For law school hopefuls who enjoy science, art or entertainment, experts say this discipline may be an attractive option. IP law is also essential for future business attorneys to fully understand, since patents, copyrights, trade secrets and trademarks are invaluable to businesses.

[Consider a legal career focusing on either health care or intellectual property.]

"If students are interested in sort of a rapidly changing, cutting-edge area of practice, I can’t think of one that is evolving at the rate of intellectual property," he says.

Experts say that law schools vary in how well they prepare students to practice IP law. Here are three signs of a strong intellectual property law program.

1. Key courses: When exploring potential law schools, experts suggest reviewing the available IP courses. Students should make sure they can take courses on how to apply for a patent, challenge a patent and file a lawsuit alleging the violation of a patent, experts say.

Experts also advise students to look for a comparative IP law course that discusses how U.S. law on this topic differs from that of other countries. This is marketable knowledge, they say, because prospective lawyers can use this information as attorneys for multinational firms that require patents, copyrights and trademarks in multiple countries.

Benjamin Katzenellenbogen, partner and chair of the recruiting committee at the Knobbe Martens IP law firm, says future business lawyers also need to take IP courses so they can understand and flag potential problems for the companies they represent.

2. Specific training: Experts say another sign of an exceptional IP law program is whether it allows students to gain field experience through clinics, practicums, externships, clerkships or internships.

Applicants should target schools with experiential learning opportunities in the specific area of IP law that they are most interested in, whether that's trademarks, patents, trade secrets or copyrights. It's also valuable, experts say, to write for an IP law journal and publish articles on a particular specialty within intellectual property, so applicants should target schools with these types of legal writing opportunities.

Kappes also recommends prospective law students look for IP law programs that participate in the United States Patent and Trademark Office's Law School Clinic Certification Program. This allows students to help with federal patent or trademark applications if they are supervised by a licensed patent or trademark attorney.

[Learn why law schools prefer science, technology, engineering and math majors.]

3. Networking opportunities: Finally, be sure not to overlook a law school's networking avenues. Waukeshia Jackson, managing partner of the Jackson & Lowe Law Group, says it's ideal to attend a law school that has solid recruiting relationships with various, local IP law firms.

“That’s going to give you an opportunity to gain experience whether it’s working over the summer or having an externship or internship with the company or with the firm," she says.

Jackson says it's also good if the law school has an active community of local IP alumni who attend networking events.

“You can start developing those relationships early on, so if there’s a community of IP professionals in and around the law school, that is definitely going to allow you to make connections early on and to be able to maybe get a mentor," she says.

Source >>

How to Patent a Design

By: Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

A design
Each “how to patent” subject is discussed in detail below. Here are ways to get a patent.

A design is anything which is not functional. A casing or cover for a working device can be a design. Other things can be designs too. A design can best be protected by a design patent application, and usually costs much less to file than a utility (“regular“) patent application. Even the government filing fee is much lower for a design patent application.

What is needed to get a design patent application? You will normally need drawings showing the design from six different orthogonal views. The application itself is very short, and has text naming the invention, describing the drawings, and ending with a claim. The drawings do not need to be like blueprints; instead, they are simplified. And, it is not necessary to have a working model.

Once filed with the US Patent Office, the design application is examined, and if granted, can mature into a design patent. But why get a design patent? For one thing, a design patent protects not only the design itself, but all obvious variations that are not within the public domain already.

By contrast, a copyright only covers copies made, which must be exact copies. And, a copyright does not cover any design, even if identical, which was not copied. So, if two inventors both make the same exact design by sheer chance, and one inventor gets a copyright, that copyright would not be usable against the other inventor. The reason is, a copyright only covers copying.

A design patent covers any design that is sufficiently close so as to infringe, even if there was no copying. A design patent is therefore valuable, yet different from a copyright.

Before getting into the details, we would like to mention that there is also something called a “provisional patent application” discussed hereunder. It gives patent pending status for one year, permitting a utility patent application to be filed at any time during that year. That is another way to get a patent. The provisional application is much less expensive than a utility patent application, and can be recommended when there is an urgent need to get a patent application on file with the US Patent Office. For example, just prior to a trade show or publication of the invention, there is an urgent need to have the idea on file with the US Patent Office. For further information, see the section below called “How to patent using a provisional patent application.”



By: Stephan Bell

Design patents give the inventor certain rights on the appearance of his invention. It is unique as it is granted only when something new is created. Moreover, it protects only the exterior form of the creation. Therefore, a design patent concerns only the aesthetics and not the materials used or its function. The period of protection is normally for 14 years.

Acquiring a Patent

To acquire a design patent, you have to go through the Patent Office in the U.S. It is typically done through an attorney and has to fulfill a set of stringent laws before it is considered. The U.S office deals with a lot of applications for design patents and it is better going through the office. However, the service of an attorney is recommended so that all the requisite documents are submitted. In fact, the office will likely review your application if it is filed through a lawyer. This is because the office is sure that a lawyer would cover patent infringement problems. It is seen that there has been a flood of patent applications for computer programming and internet improvements. Since, there are too many identical ideas before the review committee, a competent lawyer is necessary to avoid issues. Once you receive a pending number for the patent, you can begin marketing your invention and receive rewards.

Trademark Application

It is important to know how to apply for trademark and the procedure involved in it. There are basically three stages in the application process. In the first stage, applicants have 4 choices; the trademark Lanham Act, allows applicants to apply if they have used their logo in the U.S commerce. The next option in the Act allows application if they can confirm the use of the symbol in the U.S within a year of publication. The third option allows alien applicants with a foreign registration to register the same in the United States. Lastly, it permits foreign aspirants to block the priority date as per their foreign application. In the 2nd stage, an Examiner will be appointed to assess the proposed mark. Office actions will be issued and the Examiner will correspond with the applicant regarding application defects if any. In the last stage, the trademark is ready for publication in the Federal Register.

Benefits of Trademark Registration

A trademark is a significant asset of an organization. Hence, it is vital to apply for a trademark as it ensures brand name usage only by the owner. However, infringement issues are a constant problem. That is why; it’s all the more important to register it. This protects your logo or brand from illegal use. In case of possible infringement, the owner can file a case against the organization or individual and seek damages. Additionally, after 5 years, your ownership rights are indisputable. Experienced attorneys provide comprehensive protection services in this field for a reasonable fee.

Source >>


By Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

A program
Each “how to patent” subject is discussed in detail below. Here are ways to get a patent. A computer program can be copyrighted, but it can also often be patented. The types of protection are very different. Specifically, the inventive steps of the program can be patented, and because of this the patent can provide protection far beyond just the specific program language used.

First, a drawing is made showing the most important steps of the program as a flowchart diagram. It is usually not necessary to give every detail of the operation of the program; instead, the main features should be illustrated. The program should be protected by a utility patent application, since that will cover any type of program language. This is also sometimes called a “regular” patent application. The program steps can be explained in words and by the flowchart drawings. The drawings do not need to be like blueprints. And, it is not necessary to have a working program, as long as the steps could be followed by a skilled programmer.

This is a good point to mention that there is also something called a “provisional patent application” that gives patent pending status for one year, permitting a utility patent application to be filed at any time during that year. This is much less expensive, and is recommended when there is an urgent need to get something one file, for example just prior to a trade show or publication. Further below, there is a section called “How to patent using a provisional patent application.”

Here's a simple example showing how to patent an idea for a simple and amusing invention, where a computer program is used. The program determines sequential prime numbers and activates a light for a time corresponding to the prime number. Here, the blinking light is connected to a pencil eraser. For the moment, we aren't concerned with whether it has been done before, it is just an example. For now, the idea would be expressed in words, written just as above. Let's say the steps are: determine prime numbers in sequence from 1; wait until that number of seconds has elapsed; then blink the light ON for a number of seconds equal to the value of the prime number that has been reached. These steps would be shown in a simple flowchart. And, since it is possible to illustrate the idea in a drawing, we would also add a sketch showing where the light should be placed on the eraser. What else should be shown? The light should have a power source, for example a small solar panel or a small battery, and connecting wires should be shown connecting the power source to the light.


Startups Need To Plan for Cyber Security Implications from Day 1

By: Bernie Klinder, MBA

Just a few years ago, technology strategy followed business strategy. Often, it was just a footnote in the business plan. That changed dramatically as technology has evolved into a disruptive advantage that enables a new startup to move faster than entrenched competitors. Today, the technology strategy often dictates the business strategy. It’s the cornerstone for communication and collaboration for all of your employees, partners, suppliers, and customers.

Even if you aren’t a tech startup, your emails, documents, communications with customers, financial records, intellectual property, strategic plans, budgets, marketing materials, etc. are all valuable to you — and may be even more valuable to someone else.

Let’s imagine a common scenario that I’ve seen a hundred times as a consultant:

Your early stage startup is working on getting a product prototype to the MVP phase. You are seeking startup funds, and are working on a detailed business plans and pitch deck. Somewhere along the way, one of the early employees or co-founders has had their email password compromised — either via a weak password, social engineering, or by clicking malware. It doesn’t matter — someone is reading every email sent from the account, as well as every attachment. They may also have access to cloud document storage accounts and SaaS apps.

For weeks the attackers do nothing — they just watch silently collecting data. Over a period of days or weeks they work to quietly move laterally and gain more access. They may install a remote access tool on the employees laptop or compromise another users email account. They don’t delete or destroy anything, and they cover their tracks as they go. At the same time, they look for potential buyers for your information — perhaps a firm overseas who sees the potential of the business and had an interest in replicating it. After all, the startup team is doing all the hard work for them.

As the startup team works on, the hackers monitor and mirror the progress. They see the code the startup developed to make the product work. The R&D for the product. The patent application draft being passed around for review. The results of the market surveys. They take all of it silently in the background and the startup team is none the wiser.

At some point the startup finally does get funded, and the team is close to perfecting the final product before launch. When they file the patent application, they discover that someone has already filed a nearly identical document. A search discovers that an identical product is for sale on a foreign website with near identical marketing. The competitor even took the logo design and product photos.

The startup team works to make improvements, and decide on the strategy forward. While they are busy, a ransomware attack encrypts the most critical documents and they get an email demanding payment to get the data back. To make things work, someone has also logged into the payroll system and redirected a few paychecks to a burner card. The startup is bleeding cash, and investors are concerned.

The following week the suppliers begin receiving emails from the company canceling or modifying orders. The customers are receiving requests to redirect purchase orders to a new bank account. Malware is being sent to customers from your email addresses. High value customers also receive emails from a competitor offering a similar product. Amazon is flooded with nearly identical products at a cheaper price. The customer credit card database from the startup website is compromised. Then they get a letter from a law firm alleging you are violating their clients patent seeking damages. Unable to deal with the onslaught, they shut down the business.

This isn’t fear mongering: I’ve seen every one of these attacks scenarios in person. Cybercrime is rapidly becoming a major reason that small businesses fail. This happens to firms of every size, but smaller firms are becoming a preferred target as they don’t have robust security capabilities.

The hard reality is that the vulnerability to the business starts as soon as you have an email address.

Startup founders need to think about information security needs right from the start. Cyber security planning needs to start with your business planning. You’ll be far too busy to work on it “later”, and trying to implement security controls once you’ve been breached is a nightmare. Every time you add a technological capability, you need to think about how you are securing it: email, sensitive documents, online accounts, bank accounts, SaaS applications. You have to think about detection, remediation, and recovery and have those capabilities in place before you need them.

Otherwise, you’re just handing your business over to someone else.

Hope this was helpful.

Source >>


By Michael J Foycik Jr. 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at, or call at 877-654-3336.

An idea or any useful device or method
Each “how to patent” subject is discussed in detail below. Here are ways to get a patent.

Introduction and types of patent
Many types of ideas can be patented. Anything that has a function or use can be patented. Also, patent protection can cover many (but not all) types of business methods, most types of computer programs, new methods and processes, new chemicals and compounds, and new materials or new uses for old materials. Where the invention is for a design feature or an ornamental cover or casing, for example, then a design patent is the best way of protecting the invention. How to get a design patent, and how to patent a design, is explained in a separate section below.

How to Patent an Idea
An idea can best be protected by a utility patent application. This is also sometimes called a “regular” patent application. The idea can be explained in words and, if possible, by drawings. The drawings do not need to be like blueprints; instead, they are simplified and do not usually have to show conventional features. And, it is not necessary to have a working model.

Before getting into the details, we would like to mention that there is also something called a “provisional patent application” discussed hereunder. It gives patent pending status for one year, permitting a utility patent application to be filed at any time during that year. That is another way to get a patent. The provisional application is much less expensive than a utility patent application, and can be recommended when there is an urgent need to get a patent application on file with the US Patent Office. For example, just prior to a trade show or publication of the invention, there is an urgent need to have the idea on file with the US Patent Office. For further information, see the section below called “How to patent using a provisional patent application.”

Here's a simple example showing how to patent an idea for a very simple and amusing invention. The simple idea: add a blinking light to a pencil eraser. For the moment, we aren't concerned with whether it has been done before; we could find that out using a patent search if we wished. For now, the idea would be expressed in words in the patent application, written just as above. And, since it is possible to illustrate the idea in a drawing, we would also add a sketch showing where the light should be placed on the eraser. What else should be shown? The light should have a power source, for example a small solar panel or a small battery, and connecting wires should be shown connecting the power source to the light. Then, text is added to the patent application by describing the parts shown in the drawings, explaining possible uses and advantages, and mentioning possible alternatives that are included in the invention such as various types of light sources such as LEDs, incandescent bulbs, phosphorescent lighting, and so on.

Source >>

Patenting intellectual property for artificial intelligence as complex as some AI code

By: Peter J. Thompson

Benjamin Alarie, co-founder and CEO of Blue J Legal, says the patent for its AI software for legal and accounting firms is filed and pending. But in an AI world, he’s the first to admit it is far from a simple process.

“Patents take three to five years to process. At the same time, technology is moving very, very quickly. If you wait too long to patent something that’s truly innovative, it’s likely someone else will file.”

Securing intellectual property (IP) can be a major hurdle for startups at the best of times. But software – and in particular AI — brings its own unique challenges.

“There are specific complications compared to mechanical patents that are more straightforward,” Alarie says. “For example, there are a lot of nuances there in terms of what is patentable. If you have a relatively small startup, it may be advantageous to have some IP protection in order to defend your work, but it can be very expensive. The key is, how much do you want to bite off to protect yourself?”

Organizations such as TD Bank Group are recognizing the challenges facing the startup community on the IP front. It has recently announced a $30 million investment pool that will provide patent funding and expertise to new fintech ventures, so they can focus on rapid growth and innovation. “The AI domain is exploding and there is lots of potential out there,” says Tim Hogarth, vice-president, Innovation Framework & Strategies. “This program is intended to help them move faster and get done more quickly.”

Speed is only one part of the equation, however. Guy Levi, principal with Levin Consulting Group in Wyckoff, N.J., notes that the first question on the part of investors, or anyone interested in a merger and acquisition of a startup or its technology, is whether they wholly and solely own its IP. Yet the answer is not that straightforward with AI.

“Why AI is so challenging is that patent law progresses linearly, while advances in AI move more quickly creating an accelerating return situation,” he explains. “In other words, the gap between issues created by advances in AI technology and the ability of the law to address them is getting wider. Three to five years is pretty much an eternity in the AI world and any time in that process, you could be stepping into someone else’s IP.”

Carmakers are trying to steer past patent wars in bid for integrating Silicon Valley tech
One major issue is that AI startups typically use one or multiple open source software resources to build their solutions. But not all licence agreements are the same, Levi notes. “Some don’t allow you to protect your IP; others exclude you from excluding others using the source codes; while still others allow you to get a patent, but restrict you from enforcing any claim. The problem is, most companies do not know what open source they have.”

A second and intriguing challenge is that machine learning by its nature constantly writes its own code to improve itself. So who is the owner or inventor and how do you know if that code infringes on someone else’s IP?

The third conundrum is, what exactly do you protect, whether through copyright, patent or classifying it as a trade secret? Is it the source code, data set, test data sets, or other component of the process?

“These are issues we are always talking about,” Levi says.

Patents take three to five years to process. Technology is moving very, very quickly. If you wait too long to patent something, someone else will file

While it may seem insurmountable, there are some steps a startup can take when considering their IP options.

Be very clear who owns the resulting intellectual property before embarking on anything. “Sometimes people get so excited about discovering things and moving the field ahead, they can get caught unawares further down the line,” Alarie says. “If you’re part of a hackathon team for example, have a common agreement amongst the team members before you start.”

Then take the time to understand the licence agreement for the open source software you are using.

Since patent rights are based on first to file, getting an early filing date is also essential, Hogarth says. “That claim date is applicable worldwide. Hence it is critical for startups to file as early as possible, which is often when money is the tightest.”

Things could  get even more complicated as the industry evolves from narrow, single task AI applications such as a cancer diagnosis or parking, to general AI that will perform more than one task (e.g. improving the quality of life on Mars), Levi says. “When we get to general AI, all bets are off.”


The Manual for Indian Startups: a guide to documents, plans, templates and agreements

By: Madanmohan Rao

Do startups really need a founders’ agreement even if they are all college classmates? How expensive is patenting in India? What are the different documentation needs and growth tools at different stages of a startup’s growth? Many such issues are addressed in the book, 'The Manual for Indian Startups.'

The book is authored by Vijaya Kumar Ivaturi (co-founder of Crayon Data), Meena Ganesh (CEO of Portea Medical), Alok Mittal (co-founder of Indifi), Sriram Subramanya (founder of Integra Software), and Prof. S. Sadagopan (Director of IIIT-Bangalore).

“The operating models of startup ventures in India differ from the Western models,” explains Infosys Co-founder Kris Gopalakrishnan in the foreword. The book provides the Indian context in terms of compliance and documentation needs, and has been supported by CII’s Startup Council.

I have listed some of the necessary documents, plans, templates and agreements in Table 1. The book ends with a state-wise list of 64 incubators in India along with hub location and contact information (see also YourStory’s Startup Hatch profiles of accelerators and incubators).

The material is spread across 142 pages and makes for a quick read, but its real value is as a handy reference and process guide to make sure a startup is on track and does not face nasty operational surprises down the road. Related books reviewed by YourStory include Startup CEO, Startup Boards, Disciplined Entrepreneurship, and Startup Checklist.

At concept stages, founders should be prepared to do a lot of experimentation and field research to arrive at proof of concept for their idea. It is important to strike a balance between capital efficiency and product or solution completeness.

The founding team should have freshness as well as expertise in some areas like product, domain, business and operations. The founders’ agreement should capture their expectations of contribution, ownership and sharing of equity, as well as ‘what if’ scenarios (eg: redefinitions of roles further down the road; non-compete clauses). There should also be clauses for dispute detection, resolution, mediation, and arbitration.

In the entity-creation phase, most VCs and public funds require the creation of a public limited company. Founders should understand the nuances of holding companies, regional operating firms, overseas registration, and point of effective management (POEM) laws. Early-stage compliance applies to labour laws, environmental laws, IPR, liability acts, taxation, and public procurement.

On the intellectual property front, founders should carefully weigh patent jurisdiction, novelty, licensing, and portfolio management. Patent analytics helps make informed decisions on tech trends, R&D/M&A deals, and even talent management.

For startups filing for patents, there should be clear demarcation of public information, confidential information (only for employees), and classified information (only for core team). The authors advise founders to invest in creation, protection, and monetising of IP as relevant; it can also be a long, tedious, and costly process.

Marketing online and offline should be guided by market size, market wealth, competitive presence, and value proposition. Startups should have clear strategies for targeting customers, employees, media and investors.

There will be different Above the Line (ATL) and Below the Line (BTL) considerations for B2C and B2B contexts. Commission models and network effects will take some time to kick in, but can be well worth the wait.

Funding options include seed funding (Rs 10–30 lakh for 1–3 percent equity), angel funding (Rs 70 lakh–7 crore for 15–29 percent equity), and Series A (starting at Rs 14 crore, for a 24-month runway and 20 percent stake). A full-time finance person is required from angel-funded stage onwards, and a balance between market share and profit share will need to be struck at the Series A stage. Startups seeking the accelerator route may find that some companies make investments while others give grants.

Provisions and outcomes should be made for raising funds in multiple tranches and bridge rounds, along with requirements like board rights for directors and observers. Alignment between founder and investor is key for long-term success, especially with respect to exit rights and transfer rights.

In sum, the book gives a good conceptual overview with operational insights for new founders and aspiring entrepreneurs. Other resources, consultants, professionals and mentors will add further value as the startup scales (see also the article Understanding the science and art of engaging advisors and mentors).


Stronger Patents, More Startups, Better Economy


I didn’t set out to start a company. However, in 2005 I had a problem that no one else had solved. After years of contact sports and serving in the Marine Corps infantry, my joints could no longer take the pounding from running. I wanted to continue exercising, but couldn’t stand being cooped up on an elliptical machine in the gym and always found bikes to have uncomfortable seats. So working with a friend, we invented a new machine – the world’s first elliptical bicycle. Thrilled with our success and excited to help others facing the same problem, we decided to form a company to manufacturer and sell our invention. In 2008, we left our jobs and the security of steady paychecks and founded ElliptiGO Inc.

As any entrepreneur will tell you, starting a company is a risky and expensive thing to do. Since most companies fail, it’s often the worst investment a company founder will make in their lifetime. Fortunately for us, many Americans take that risk every year, and the few who succeed generate tremendous benefits for our society.

When my co-founder and I began working on our “ElliptiGO project” in 2005, the business climate for startups was a lot different than it is today. Back then, there were many more Americans trying to start new companies. The New York Times recently reported that the rate of startups has plummeted to one of its lowest levels in decades. This decline in startups should concern us all. Startups are a critical part of our economy. They create nearly half of all new U.S. jobs and a significant amount of the innovation that drives our economy and makes our world a better place to live.

One of the leading causes of this startup decline is something that we have inflicted upon ourselves. For the past decade, there has been a concerted effort in our country to weaken the U.S. patent system. While that may not seem like a big deal, the reality is that having an enforceable patent is sometimes the determining factor for whether or not an inventor takes on the risk of actually starting a company.

There’s good reason for that. Researchers at MIT have found that startups that file patents are 35 times more likely to succeed. Scholars from Harvard and New York University similarly found that patents increase a startup’s sales growth by 51 percent and the probability of securing venture capital funding by 53 percent. I know this is true from my own experience. Having a strong patent portfolio has been our primary means of defending against foreign knock-offs. It has also helped us raise capital, attract high quality talent and land great sales partners around the world.

That’s why I’m concerned about the spate of Supreme Court cases and legislation that have weakened U.S. patent rights over the past decade. These efforts have caused the U.S. to fall from first to 10th place on the U.S. Chamber of Commerce’s global index of patent system strength. We’re now tied with Hungary. Not surprisingly, venture capital is fleeing to Europe and China, with our share of global venture capital investment falling from 83 percent in 1996 to near 50 percenttoday. If we don’t stop this trend, our economy and global competitiveness will be severely harmed.

Fortunately, there is bipartisan legislation currently on the table that would be a good first step towards strengthening our patent system. The “STRONGER Patents Act,” introduced by U.S. Sens. Chris Coons and Tom Cotton in June, would make it easier for patent holders to obtain injunctions so they can stop infringers from profiting off their theft while cases play out in court. It would also treat patents like any other property, as our nation’s founders intended when they included patent rights in the U.S. Constitution. Reinstating those rights would lower the risks for potential startup founders and encourage more people to bet on themselves and their innovations. It is the kind of trajectory we need to put our patent system on if we want to re-invigorate our startup culture.

When we filed our first patent in 2006, we were two guys in a garage with an idea for a product that didn’t exist. There were literally hundreds of companies better positioned than us to bring this idea into the world. My co-founder and I would not have considered starting our company if we didn’t believe in the protection and enforceability of patents. I’m glad the patent system was stronger back then and that we decided to take the risk and start a company. I’m not sure we would have had the guts to start our company if the patent system back then was what it is now. That needs to change and that change can’t start soon enough.



By: Hardware Massive

When I first read articles about how “hardware is hard”, I felt a little bit scared about the industry I was getting into. Understanding some of the issues first timers face when launching a product made me rethink how to support our community of makers from a non-technical perspective.

After many conversations with entrepreneurs building their hardware project, I realised there might be many differences in terms of product, market and consumers, however many other similarities can be considered a common path between startups. And when it comes to the ups and downs of a startup journey, external support may turn this entire experience less hard, depending on when you decide to get support and how willing you are to accept external help.

We can trace parallels between the challenges hardware startups face and a roller coaster experience: in some moments you might be cheerful and excited to reach the top, as in others you’ll be exhausted and stressed after going all the way down.

When riding the hardware startup roller coaster for the first time, most entrepreneurs might be terrified thinking about the hardware startup journey –  and some crazy ones will dive into it anyway. Depending on who you decide to partner with, you’ll see your journey from a different perspective. I hope this step by step can encourage more startups to reach out for qualified support at each step, and learn how important the process is – not only the final results. Buckle your seats and let’s enjoy the journey together!

1) The Way: Why and where do you want to go now?
So you’ve arrived at this great amusement park called startup ecosystem, and many others seem to have arrived earlier than you. This makes you even more desperate to start working on something right away! Your mind is blowing by all possibilities you’re about the enjoy with the goal to “make the world a better place!”

There’s so much going on that you don’t even know where to start from! As you watch the reactions from entrepreneurs around you, in a mixture of euphoria and fear, you observe comments about a few of them getting funded, while others complain about failures. In the end, what calls your attention is the positive voice of the ones who kept smiling, excited to point out how amazing their life is and how much they’ve learnt so far!

Before immersing into this deep experience and you start working on a new product, find a shady spot and think about your motivations.

Where do you want to head now? Considering why you came up with this idea, are you trying to solve a real problem? And does it make sense to build a physical product as part of your solution? (as time goes by, keep those questions in mind)

Also, be honest about your expectations and how willing you are to spend a significant part of your life as a startup entrepreneur. As the DIY movement spread all over the world and set a lower entry level for new inventions to take shape – with 3D printers and laser cutters accessible to different hubs, many startups have been created without a clear value proposition, and that’s what how you can differentiate yourself from hobbyists. What defines a startup is the mindset, since the beginning!

Who should join you from the start: Co-Founders, Family & Friends.

2) Immersion: Are you ready?
You could skip the line of market immersion, taking the shortcut that leads to the entrance gate, as many others have been trying do, although this won’t save you time or money – it’s going to make you even more tired, as queueing is mandatory for the rollercoaster of hardware startups. You should reach the same basic milestones: learn, build, measure. If you skip any part of the process, you might have to step back and start it over anyway: it’s hard to continue the way without some basic iterations done in-house.

All efforts to develop IoT devices can bring effective innovation to the world – and it’s great to see a clear mission driving entrepreneurship. Although ideas need some initial execution and we know that as a hardware entrepreneur, you’re excited to make it happen soon.

Prior to starting your hard work, check if your ticket is still valid today!

Benchmarking should be a continuous activity – by the time you start building something, others might have launched their own solution. Use all the tools you can to track recent industry updates and get involved with stakeholders who know what’s not available yet.

Research other products available in the market that solve the same problem and study not only the good cases but also what’s not working so well. A good exercise would be mapping the potential players who’d be interested to launch something similar to your product.


Economic Benefits of Intellectual Property Rights

By: Shrivatsav.n

1. Introduction
The question of how Intellectual Property Rights affect the processes of economic development and its growth is complex and based on multiple variables. In theory stronger systems for the protection of intellectual property could either enhance or limit economic growth. Nevertheless, evidence is emerging that stronger and more certain intellectual property law could well increase the economic growth and foster beneficial change, thereby improving developmental prospects, if they are structured in a manner that promotes effective and dynamic competition.

As the global protection regime strengthens due to TRIPS, numerous questions arise about the impact on prospects of economic growth. For a lot of reasons, it is not possible to confidently say that the new regime will raise economic growth and improve development process. There are two major reasons. First, many variables affect the growth in ways that can dominate the impact of TRIPS. Second, economic theory points out that intellectual property rights could have a lot of effects on growth, some positive and some negative.

With this background the paper addresses how Intellectual Property Rights may improve economic development.

2. Economic Development and Intellectual Property Rights
Economic analysis of Intellectual Property Rights is utilitarian, questioning whether the benefits of any system outweigh its costs, both in static and dynamic terms. The anticipated benefits and costs depend on characteristics of markets, products and social institutions.

2a. The Purposes and Mechanisms of Intellectual Property Rights
There are two main economic objectives of any system of intellectual property protection. The first is to promote investments in knowledge creation and business innovation by establishing exclusive rights to use and sell newly developed technologies, goods and services. Not providing such rights would lead to economically valuable information could be appropriated without compensation by competitive rivals; hence institutions and individuals would be reluctant to invest money and effort into research and commercialisation activities. The second goal is to promote widespread dissemination of new knowledge by encouraging or requiring rights holders to place their inventions and ideas on the market. Economically, it is efficient to provide wide access to new technologies and products, once they are developed, at marginal costs production. Such costs would be quite low as it might entail simply copying a blueprint or making another copy of a storage medium.

There is a fundamental tradeoff between these objectives. An overly protective system of IPRS could limit the social gains from invention by reducing incentives to disseminate its fruits. However, an excessively weak system could reduce innovation by failing to provide an adequate return on investment. Thus, a policy balance needs to be found that is appropriate to market conditions and conducive to growth.

Different forms of IPRS operate in distinct fashions and it is misleading to group them together. Therefore, it is helpful to mention briefly what the various mechanisms are. First, patents provide the right to prevent for 20 years the unauthorized making, selling, importing, or using of a product or technology that is recognized in the patent claim and that must demonstrate novelty and industrial utility. Related devices are utility models, or petty patents, which provide exclusive rights for a shorter period for incremental inventions, and industrial designs. In most countries patent applications are made public after a prescribed time period. Thus, patents establish a protected market advantage in return for revealing technical knowledge. Several aspects of patent scope affect the effective strength of protection.

Trademarks protect rights to market goods and services under identified names and symbols. Trademarks and brand names must be sufficiently unique to avoid confusing consumers, thereby playing the important role of reducing consumer search costs. These rights encourage firms to invest in name recognition and product quality. They also induce licensees to protect the value of assets by selling goods of guaranteed quality levels. If trademarks were not protected, rival firms could pass off their lower-quality goods as legitimate versions of those produced by recognized companies. This situation would diminish incentives for maintaining quality and would raise consumer search costs. Economists generally believe that the danger of market dominance through abuse of trademarks is slight in competitive economies but such marks could be accompanied by significant market power in countries with other barriers to entry.

Firms develop some technologies that might not be patentable, might not be worth the cost of applying for a patent, or might be more valuable if kept undisclosed. They prefer to keep knowledge of such processes proprietary as trade secrets, or undisclosed information. Trade secrets are protected by legal rules against learning by rivals through dishonest means. Such protection lapses if the technologies are discovered by fair means, such as independent invention or reverse engineering. Protecting trade secrets is beneficial to the extent it encourages the development and commercial use of sub-patentable inventions. Rules protecting trade secrets thus promote adaptive innovation and encourage learning through legal means.

Literary and artistic creations and computer software are protected by copyrights, which provide exclusive rights for some period to copy and sell particular expressions of ideas after they are fixed in some medium. Related IPRS include neighboring rights of performers and broadcasters, moral rights of original artists, and copyrights for derivative products. Like patents, copyrights are limited in scope for various purposes of public policy. The most significant limitation is the fair-use doctrine, under which it is lawful to make limited numbers of copies for research and educational purposes.

Several technologies do not fit comfortably into these traditional categories of protection. Because computer programs may contain elements of industrial utility in addition to their expressive elements, some countries make programs eligible for patents. The designs of integrated circuits typically are awarded exclusive rights for shorter time periods than patents, recognizing that semiconductor designs often embody elements of expression and that technology changes quickly in that industry. Electronic transmissions of internet materials, broadcasts, and databases may not be adequately protected by standard copyrights and two recent treaties reached in the World Intellectual Property Organization call for stronger protection in certain dimensions (WTO, 1998).

Particularly controversial, especially in developing nations, are patents for biotechnological inventions and plant breeders’ rights. It could be argued that patents generate strong and unwarranted protection in the biotechnology industry, because such inventions may not embody a truly inventive step. However, representatives of biotechnology firms claim that patents are required to encourage investment in these risky technologies. There are significant concerns that providing exclusive rights in seed varieties without significant limitations for farmers’ use and competitive research could raise costs in agriculture and reduce biodiversity over time.

A final element of an intellectual property system is its enforcement. Such enforcement entails two opposing tasks: punishing infringement by free riders and disciplining enterprises that try to extend their rights beyond intended levels by acting in an anti-competitive manner. These objectives require the development of extensive legal and scientific expertise.

3. Economic Benefits of Intellectual Property Rights
Consider now the opposite direction of causation. Economists recognize several channels through which IPRS could stimulate economic development and growth. These processes are interdependent and it is appropriate to adopt a comprehensive view of the incentives associated with intellectual property protection.

Intellectual property rights could play a significant role in encouraging innovation, product development, and technical change. Developing countries tend to have IPRS systems that favor information diffusion through low-cost imitation of foreign products and technologies. To become competitive, enterprises in developing countries typically must adopt new management and organizational systems and techniques for quality control, which can markedly raise productivity. Such investments are costly but tend to have high social returns because they are crucial for raising productivity toward global norms (Evenson and Westphal, 1995). They are more likely to be undertaken in an environment where risks of unfair competition and trademark infringement are small. Moreover, IPRS could help reward creativity and risk-taking among new enterprises and entrepreneurs. Countries that retain weak standards could remain dependent on dynamically inefficient firms that rely on counterfeiting and imitation.

An example of this process is that protection for utility models has been shown to improve productivity in countries with lagging technologies. In Brazil, utility models helped domestic producers gain a significant share of the farm-machinery market by encouraging adaptation of foreign technologies to local conditions (Dahab, 1986). Utility models in the Philippines encouraged successful adaptive invention of rice threshers (Mikkelsen, 1984).

Maskus and McDaniel (1999) considered how the Japanese patent system (JPS) affected postwar Japanese technical progress, as measured by increases in total factor productivity (TFP). The JPS in place over the estimation period 1960-1993 evidently was designed to encourage incremental and adaptive innovation and diffusion of technical knowledge into the economy. Mechanisms for promoting these processes included early disclosure of, and opposition proceedings to, patent applications, an extensive system of utility models, and narrow claim requirements in patent applications. The authors found that this system encouraged large numbers of utility model applications for incremental inventions, which were based in part on laid-open prior applications for invention patents. In turn, utility models had a strongly positive impact on real TFP growth over the period, while patent applications had a weaker but still positive effect. They concluded that utility models were an important source of technical change and information diffusion in Japan, while patent applications provided both a direct and an indirect stimulus to productivity. It is interesting to note that as Japan has become a global leader in technology creation, its patent system has shifted away from encouraging diffusion and more toward protecting fundamental technologies.

Recent studies suggest that innovation through product development and entry of new firms is motivated in part by trademark protection, even in poor nations. A survey of trademark use in Lebanon provided evidence on this point (Maskus, 1997). Lebanon has an extensive set of intellectual-property laws but they are weakly enforced. Firms in the apparel industry claimed to have a strong interest in designing apparel of high quality and style aimed at Middle Eastern markets. Such efforts have been frustrated by trademark infringement in Lebanon and in neighboring countries. Thus, local product development and establishment of new firms have been stifled by trademark infringement targeted largely at domestic enterprises.

Similar problems exist in China, as found in a second survey (Maskus, et al, 1998). While the information was anecdotal, it suggested that trademark infringement negatively affected innovative Chinese enterprises. Many examples were cited of difficulties facing Chinese producers of consumer goods, such as soft drinks, processed foods, and clothing. The establishment of brand recognition in China requires costly investments in marketing and distribution channels. Enterprises that achieved this status quickly found their trademarks applied to counterfeit products. Such products were of lower quality and damaged the reputation of the legitimate enterprise. Furthermore, this problem was difficult to overcome and, in some cases, forced enterprises to close down or abandon their trademarks. According to survey respondents, this situation had a deterrent effect on enterprise development and effectively prevented interregional marketing. In turn, enterprises were less able to achieve economies of scale. Chinese trademark infringement was concentrated on products with low capital requirements and high labor intensity. These are sectors in which China has strong comparative advantages. On this evidence, the authors concluded that trademark violations may be particularly damaging to enterprise development in poor nations.

Similar comments apply to copyrights. Copyright industries, such as publishing, entertainment, and software, are likely to be dominated by foreign enterprises (which can absorb temporary losses and afford the costs of deterring infringement) and pirate firms in countries with weak protection and enforcement. Thus, lower-quality copies would be widely available but the economy’s domestic cultural and technological development would be hampered. This situation was clear in the Lebanese survey. Lebanon has a small but vibrant film and television industry that could successfully export to neighboring economies if those countries engineered stronger copyright protection. In China, the domestic software industry has grown rapidly in the area of particular business applications, which did not suffer extensive unauthorized copying, but has faced obstacles in developing larger and more fundamental programs. Thus, domestic commercial interests in stronger copyrights have emerged and are now playing a role in promoting enforcement.

Intellectual property rights also could stimulate acquisition and dissemination of new information. Patent claims are published, allowing rival firms to use the information in them to develop further inventions. This learning process takes place in 10 to 12 months in the United States (Mansfield, 1985). Knowledge formation is cumulative and as new inventions build on past practices the process of technical change could accelerate (Scotchmer, 1991). Patents, trademarks, and trade secrets also afford firms greater certainty that they face limited threats of uncompensated appropriation. This certainty could induce them to trade and license their technologies and products more readily, enhancing their diffusion into the economy.

In strengthening their IPRS regimes, either unilaterally or through adherence to TRIPS, developing countries hope to attract greater inflows of technology. There are three interdependent channels through which technology is transferred across borders. These channels are international trade in goods, foreign direct investment (FDI) within multinational enterprises, and contractual licensing of technologies and trademarks to unaffiliated firms, subsidiaries, and joint ventures. Economic theory finds that technology transfers through each channel depend in part on local protection of IPRS, albeit in complex and subtle ways.
There are important practical implications of this analysis. First, countries with weak IPRS could be isolated from modern technologies and would be forced to develop technological knowledge from their own resources, a difficult and costly task. Second, those countries would obtain fewer spillover benefits and demonstration effects of new technologies in their economies. Third, technologies available to such nations would tend to be outdated. Finally, nations with weak IPRS would experience both limited incentives for domestic innovation and relatively few inward technology transfers.

Recent survey evidence from China supported these arguments (Maskus, et al, 1998). When interviewed, managers of many foreign enterprises expressed reluctance to locate R&D facilities in China, citing fear of misappropriation and patent infringement. Nearly all reported that their enterprises transferred technologies that were at least five years behind global standards, unless other means could be found to protect them, or brought in technologies that would be obsolete in a short time. Note that the importation of lagging technologies is not necessarily inappropriate for China’s cost conditions and such knowledge could help encourage follow-on innovation. However, as China moves toward best practices in technology the problem could become more restraining. Moreover, concerns about weak IPRS discouraged foreign enterprises from fully integrating their Chinese operations. Instead they tended to divide production processes among facilities in order to avoid revealing the full nature of their technologies in any one location.

Indeed, IPRS should encourage the development of interregional and international distribution and marketing networks that are critical for achieving economies of scale. Weak IPRS could limit incentives for such investments because rights owners would be unable to prevent their marketing outlets from debasing the quality of their products, nor could they readily deter counterfeiting of their trademarks. Thus, IPRS should permit effective monitoring and enforcement of activities throughout supply and distribution chains, providing both innovators and distributors an incentive to invest in marketing, service, and quality guarantees.

Quality assurance is important for safeguarding the interests of consumers. However, widespread distribution of counterfeit products can ruin reputations achieved at considerable cost, a problem that can be overcome only with additional investments. For example, in food products, beverages, cosmetics, and medicines, counterfeit products can be hazardous for consumers. Indeed, field research in China suggested that despite the benefits to poor consumers of low-cost product knockoffs, they were becoming resentful that market saturation by unauthorized goods diminished the available range of legitimate goods (Maskus, et al, 1998).

A further potential benefit of strengthened intellectual-property protection is that it could induce greater R&D aimed at meeting the particular needs of developing countries. Inventive firms in developed economies tend to orient their research programs toward products and technologies for which they expect a large global demand and that may be protected through IPRS and trade secrets. This means that a disproportionately small amount of global R&D is focused on the needs of developing economies with low incomes and weak IPRS. For example, the World Health Organization (1996) claims that of the $56 billion spent globally on medical R&D in 1994, only 0.2% was aimed at pneumonia, diarrheal maladies, and tuberculosis, which together account for 18% of global illness.

It is possible that the new patent regimes introduced by TRIPS could change this situation. The total market size for pharmaceuticals of the countries that must upgrade their patent protection over the medium term is sufficiently large that, even at current shares of drugs patented elsewhere, the rise in demand could be as much as 25% of global spending (Lanjouw, 1997). Thus, the incentives generated for R&D focused on diseases of poor countries could be significant. While this is a crude calculation, it suggests that pharmaceutical firms could anticipate higher profits in developing nations, some portion of which could be devoted to research on their endemic diseases.

Nonetheless, there is considerable uncertainty about this outcome and it is possible to doubt its practical significance. Even with stronger patents (the enforcement of which would be problematic), the ability of impoverished people to buy protected treatments would not rise much for a long period of time. In this context, a strong argument for public promotion and international procurement and distribution of new drugs may be made.

4. Conclusion
Economic theory demonstrates that IPRS could play either a positive or negative role in fostering growth and development. The limited evidence available suggests that the relationship is positive but dependent on other factors that help promote benefits from intellectual property protection. In brief, IPRS could be effective and market-based mechanisms for overcoming problems that exist in markets for information creation and dissemination. However, their existence could pose problems in terms of their potential for costs and anticompetitive abuse.

Accordingly, modern IPRS systems are not sufficient by themselves to encourage effective technology transition. Instead, they must form part of a coherent and broad set of complementary policies that maximize the potential for IPRS to raise dynamic competition. Such policies include strengthening human capital and skill acquisition, promoting flexibility in enterprise organization, ensuring a strong degree of competition on domestic markets, and developing a transparent, non-discriminatory, and effective competition regime.


6 Startup Strategies That Turn Off Most Investors

By: MartinZwilling

Don’t bash the competition. Every investor knows how vulnerable a new startup is to competitors, so investors always ask about your sustainable competitive advantage in the marketplace. How an entrepreneur answers this question speaks volumes about their knowledge of business realities, customers, confidence, and their ability to handle investor funding.

There is no perfect answer to the competitive advantage question, but investors are looking for how your offering will keep ahead of competition, not just at this moment, but throughout the life of their three to five-year investment. They are also seeking to find out how you handle one of the many tough questions that a new founder will get in today’s market.

A strong answer should be something like “Our product introduces a new lower-cost technology, which we have patented and trademarked, that makes us very attractive today, and will provide a wealth of additional products as we move forward.” That says you are competitive today, have a real barrier to entry, and the potential to remain ahead of the competition for a long time.

Based on my own experience as an angel investor, and feedback I get from many other investors, here are a collection of answers that we often hear instead, from the least credible to at least reasonable:

1. Insist you have no competitors. Leading with this answer will likely terminate any further investment opportunity with this investor. He or she will assume your comment means there is no market for your product or service, or you haven’t looked. Neither speaks well for you or your startup. Even if you hedge by saying no direct competitors, we all know that existing cars are still big competition to your new flying automobile.

2. Claim the first mover advantage. This is one of the most frequent responses I hear, and is rarely convincing. The problem is that startups have limited resources to keep them ahead of big companies. If your early traction highlights an opportunity they have missed, they can mobilize their huge resources and run over you. First mover advantages are only sustainable by large companies, or founders with deep pockets.

3. Proclaim your solution as a paradigm shift. If you insist that your technology is so new and unique that it will disrupt your competitors and the whole market, investors will fear that neither they nor you can afford the time and marketing required to weather the change. They will likely decline on the basis that historically, pioneers get all the arrows.

4. Highlight your world-class team as the secret sauce. Insisting that your team is better than any other, giving you a sustainable competitive advantage for the long term, will likely come across as naiveté or arrogance. Investors know that no startup has a lock on the best people and processes, and investors don’t deal with unrealistic founders.

5. Declare that you will offer the product or service free. Free is a dirty word to investors, since they need a return on their investment. Perhaps you intend to collect money from advertisers, but this requires a large investment to get the audience you need before monetization can work. Facebook spent over $150 million before revenue.

6. Intellectual property as barrier to entry. I like patents, trademarks, and trade secrets, so this answer is a better sustainable competitive advantage than the other five answers. Now all you have to do is defend your position, and we all know that patents can break a startup in court battles, and will have alternative implementations if the price is right.

Thus, there is no perfect answer to this question, so the best entrepreneurs see it as an opportunity to highlight their own advantages, rather than put down a competitor. Being negative is never the answer. For example, it’s tempting to say that your worst competitor has poor quality products, requiring costly maintenance, but it’s much better to say that you provide a five-year free warranty that no competitor can match.

After highlighting your best competitive features and your intellectual property barriers to entry, I encourage you to put on your humble face, and proclaim your determination to never stop improving your products and processes to out-distance competitors. You want investors to believe that you are a realist, but have the confidence and determination to win.

Investors know that winning in today’s highly competitive environment is more a mindset than a product feature. Competitor bashing is not a skill that you need to hone. I look for entrepreneurs that can sell themselves and their offering to discerning customers. Money from customers and investors is the same color.


5 Clean Water Startups Emerging in Israel

By: Eze Vidra

There is no human need more basic than water. We simply can’t survive without it. I talked about Charity:Water in a previous post, but today my focus is on agtech.

This week water has been on my mind for several reasons. One is the sale of Israel’s Netafim, the company that invented drip irrigation, to Mexichem for $1.5 billion. Netafim’s technology essentially enables farmers to “grow more with less,” increasing yields and improving crop production while preserving quality and quantity of water and soil fertility. The story of Netafim is profiled in the Coller Venture Review issue on deep innovation.The second reason is connected to Philanthropy. Jeff Bezos asked the world how he should donate his money on Twitter. He got more than 46,000 responses, but that created a new problem: how can he sift through all the answers, create themes and understand which ones would be most impactful.

That’s where AI came into the picture in the form of, a startup specializing in a form of advanced decision making called swarm intelligence, which essentially emulates the behavior of a bee swarm to come up with the most complete community decision. Bottom line is, after a rigorous process which included human evaluators ranking 6 choices at a time, a winner was clearly chosen. You guessed it: Universal Access to Clean Water topped the list.

Israel is a hotbed for agtech in general, and water tech more specifically. It came from a necessity: a small country with limited fresh water supply, Israel needed to figure out how to desalinate water, save water, and irrigate the desert. Netafim started in a Kibbutz in the 1960s, but to this day, there are approximately 130 startups operating in the water space in Israel alone, and it’s a buzzing space. There’s even a dedicated Water Tech conference.

You can find the full list on Startup Nation Central, but here are a few select Israeli agtech startups in the water space:


WaterGen’s cutting-edge technology provides an abundant, renewable source of fresh and clean drinking water by extracting it directly from the air. With the patented GENius, the world’s most energy-efficient atmospheric water generator (AWG) module of its kind, Water-Gen’s various water-from-air generator models can serve the clean drinking water needs from a small house to whole villages to an entire country.


Utilis technology is based on the analysis of multi-spectral, aerial images that capture the area of a suspected leak. By processing these images and applying algorithms, the system uses essential physical parameters, such as geological, meteorological, and hydrological factors. After calculating and adjusting for any distorting factors, the information is intersected with piping infrastructure layouts to indicate the location of underground water leaks.


TaKaDu’s patented technology uses raw data from multiple sources, analyzing the data to detect and manage the full life-cycle of network events, including leaks, bursts, and faulty assets.

Based on big data analytics and sophisticated algorithms, TaKaDu’s IoT cloud-based solution helps water utilities detect problems early, reduce water loss, shorten repair cycles, and improve customer service.


Indegy provides visibility and security for industrial control networks. The platform delivers comprehensive visibility and oversight into all OT activities, including changes to controller logic, configuration, and state.


Desalitech is a provider of high-recovery water production and effluent treatment solutions. The company’s ReFlex reverse osmosis (RO) systems offer maximum recovery and feature Desalitech’s patented closed-circuit desalination (CCD) process.

CCD represents an improvement in RO water treatment by achieving efficient use of water resources, reduced emission of brine waste, increased flexibility and reliability, and lower power consumption, all using standard, off-the-shelf RO components.