Getting Investors - Ultra Quick Tips

By: Michael J Foycik Jr. 
Septemper 18, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

So, you need an investor.  Probably to start a new business and launch a new product.  Here's a very short yet useful guide.

Get a distributor.  Yes, they don't sound like investors, but it helps to see them that way.  Why so?  A typical one will bear the costs in some way, and help sell the product.  These things are what a good investor would do.  Typically, with a new product, you can expect to get anywhere from 2 to 9 percent of the selling price, though this can vary.

Sell though a TV marketing company – you know the ones.  You see them on late night television, or on cable channels that sell goods.  And yes, they don't sound like investors, but it will help to look at them that way.  A typical one will help with the costs in come way, and perhaps even with the development and testing of the product.  These are things a good investor might do.  Typically, one might expect anywhere from 2 to 4 percent of the selling price.

Source >> http://internationalpatentservice.com/Getting-Investors-Ultra-Quick-Tips.html

China and Worldwide: Trademarks Good, Patents Bad

By Dan Harris
February 26, 2018

The title to this post is a gross oversimplification meant to prove a point or, more accurately, disprove a myth. I cannot tell you how many times I’ve had companies swoon over the idea of spending big money to secure a patent and pooh-pooh my suggestion to spend small money to secure a trademark. Honestly, most of these companies don’t really get it.

Let me explain.

1. Patents are virtually always expensive to get and virtually always expensive to protect.

2. Trademarks are virtually always inexpensive to get and a lot of the time inexpensive to protect.

Let me further explain, first with patents:

1. Securing a patent (other than a design patent) typically costs three to four times what a trademark costs. This is true in China, the United States, Europe, Canada, Mexico, wherever.

2. If you believe someone is violating your patent and you send them a cease and desist letter to get them to stop doing so, there is a pretty good chance they will claim there is no violation. And after you explain to them why there is a violation, there is still a pretty good chance they will  explain to you why you are wrong. If their orthopedic device is exactly like yours but for some relatively unimportant button somewhere, they will claim that relatively unimportant button is actually important and it means they are not violating your patent.

3. If you go to the e-commerce sites on which they are selling the orthopedic device that almost certainly does violate your patent and you ask that e-commerce site to take down the infringing product, the odds are good that site will tell you that they are not patent lawyers and you will need a court order or a judgment for them to take it down. This is generally true of tall the leading e-commerce sites around the world.

4. The above means that if you want to stop your competitor from selling what you see as the infringing orthopedic device you must sue and you likely will need to hire an expensive expert to prove the infringement. Few things in life cost more than patent litigation, and since my law firm does patent litigation, I know whereof I speak on this.

But trademarks are much simpler and much cheaper:

1. Securing a trademark typically costs 1/3 to 1/4 less to secure than a patent. This is true pretty much everywhere.

2. If you believe someone is violating your trademark and you send them a cease and desist letter to get them to stop doing so, there is a decent chance they will stop, especially if they are not in the counterfeiting business. If I brand my orthopedic devices “The Harris Special Orthopedic Device” and secure trademarks for that name and someone else uses that very same name, they are going to have a tough time claiming they are not violating my trademarks — assuming I have the registered trademark in the relevant countries.

3. If you go to the e-commerce sites and request that the product that is violating your trademark be taken down (and it is in fact violating your registered trademark), there is a very good chance it will be taken down. This is generally true of the leading e-commerce sites around the world. Take the “Harris Special Orthopedic Device” as the example. It does NOT take a lawyer to know that if I have the registered trademark in China and the United States for “Harris Special Orthopedic Device” (in the right class), anyone else selling “Harris Special Orthopedic Device” in China or the United States (that did not come from me) is violating my trademark. My law firm’s success rate in taking down offending trademarks is really really high.

4. And should you choose to sue for a trademark violation, proving the trademark violation is oftentimes relatively easy.

Oh, and one more thing. To grossly generalize. patent protection in China courts tends not to be as strong as in either the United States or Europe. Whereas China trademark protection tends to be surprisingly strong.

There. I’ve said my piece.
Your thoughts?

Read More >> https://www.chinalawblog.com/2018/02/china-and-worldwide-trademarks-good-patents-bad.html

Getting Investors – Surprising Types

By: Michael J Foycik Jr. 
September 16, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

So, you need an investor.  Probably to start a new business and launch a new product.  Here's a very short yet useful guide to some surprising types of investor.

Get a distributor.  Yes, they don't sound like investors, but it helps to see them that way.  Why so?  A typical one will bear the costs in some way, and help sell the product.  These things are what a good investor would do.  Typically, with a new product, you can expect to get anywhere from 2 to 9 percent of the selling price, though this can vary.

Sell though a TV marketing company – you know the ones.  You see them on late night television, or on cable channels that sell goods.  And yes, they don't sound like investors, but it will help to look at them that way.  A typical one will help with the costs in come way, and perhaps even with the development and testing of the product.  These are things a good investor might do.  Typically, one might expect anywhere from 2 to 4 percent of the selling price.

Go to an investment club.  There are surprisingly many if you look.  Try online searches, and word-of-mouth if necessary.  Ask around, especially in local businesses, where the owner might well belong to such an investment club.  A good investor will take about 10 to 50 percent of your business, in exchange for investment money and possibly expertise.  A good investor will know how to help you succeed!

Press releases!  There are companies that do those.  The more press releases, the better.  Put up a web site so investors reading the press releases can find you.

Read More >> http://internationalpatentservice.com/Getting-Investors-Surprising-Types.html

Patents, what are they good for?

By: gunnertech
February 21, 2018

At Gunner Technology, we deal a lot with patents.

In fact, we deal with a lot of Intellectual Property protection, including patents, copyrights, trademarks and non-disclosure agreements.

There’s often confusion around what each of these do, so it’s probably best to start there.

Patents
A patent is a right granted to an inventor by the federal government that permits the inventor to exclude others from making, selling or using the invention for a period of time.

Patents are further broken down into three categories:

Utility Patents: The most common type of patent, these are granted to new machines, chemicals, and processes.

Design Patents: Granted to protect the unique appearance or design of manufactured objects, such as the surface ornamentation or overall design of the object.

Plant Patents: Granted for the invention and asexual reproduction of new and distinct plant varieties, including hybrids.

Design patents expire 15 years from issuance while Plant and Utility patents expire 20 years from the date on which the application for the patent was filed.

We’ll be focusing primarily on utility patents.

Trademarks
A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.

A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.

Some examples include: brand names, slogans, and logos. The term “trademark” is often used in a general sense to refer to both trademarks and service marks.

Unlike patents and copyrights, trademarks do not expire after a set term of years.

Trademark rights come from actual “use.”

Therefore, a trademark can last forever – so long as you continue to use the mark in commerce to indicate the source of goods and services. A trademark registration can also last forever – so long as you file specific documents and pay fees at regular intervals.

Copyright
A copyright protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software and architecture.

The duration of copyright protection depends on several factors.

For works created by an individual, protection lasts for the life of the author, plus 70 years.

For works created anonymously, pseudonymously, and for hire, protection lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter.

Read More >> https://gunnertech.wordpress.com/2018/02/21/patents-what-are-they-good-for/

Let's Sue That patent Infringer - Or Maybe Not!

By: Michael J Foycik Jr. 
August 23, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Someone is infringing your patent.  Now you want to rush out and sue them!  Let's stop and talk about that for a minute.

The best reason to wait: that infringer is promoting your product, which takes time, money and effort before it pays off.  So, let them do it for a while, and then swoop in!  You shouldn't wait too long, perhaps a year or two or three, although some case law suggests that you can wait six years to sue.  Don't rely on that, of course - in a specific case your patent attorney should verify and recommend specific deadlines. 

 Let's just mention that there can be a number of defenses to a patent lawsuit.  Such defenses depend on the answers to the following (and possibly other) questions, such as: Was the infringer actually the first to use it?  Can your patent be challenged?  Were you actually damaged?  Is the alleged infringer's device/product really close enough to your patent to infringe its claims? 

Now let's say there are no defenses to the lawsuit, and victory is absolutely certain.  This is very hypothetical, of course, since there is always some uncertainly.  But, assuming this perfect situation, should you still go ahead and sue?  The answer may be “no” for a number of reasons!

So don't sue?  Why not?  Well, for starters, if the infringement was for a small number of products, you are unlikely to get meaningfully large damages.  It is very easy to spend more money that you can recover.  That's right, you can win the lawsuit and yet get little or no cash.

If the court finds in your favor, you can ask for actual damages, and/or lost profits, and/or attorneys fee, and/or costs, among other things.  Notice I said you can ask!  However, asking is not the same as getting.  Worse, it can be difficult to prove lost profits or actual damages.

Even in a good case, with ample proof, it can be difficult to get a damage award that really compensates for the time and effort of litigation.  Money is not the only cost of litigation.  And, a damage award is not the same as actually receiving money, since defendants may not have assets to cover the damage award, may declare bankruptcy, and may even simply hide their money.

Read More >> http://internationalpatentservice.com/Lets-Sue-That-patent-Infringer.html

India's Startups Are Filing More Patents Than Ever Before -- Here's Why

By: Sindhuja Balaji

Abhishek Satish and Adarsh Warrier were students pursuing engineering in the south Indian town of Vellore when they founded Vicara - a startup that develops wearable technology devices. Soon after, Satish and Warrier filed a patent for a gesture recognition device they'd created called Kai. “When we created the technology, we knew there would be competition. It doesn’t take long for someone to copy your work and pass it off as theirs. For a hardware startup, a patent serves as a form of insurance,” says Satish.

Despite being common practice in other parts of the world, the importance of filing patents has only just become apparent to young startups in India, as the country increasingly moves towards becoming an innovation hub in Asia. Moreover, the Indian government has begun offering incentives to encourage innovators to file patents, including attractive tax rebates and speedy documentation processing.

Tackling Rising Costs

One of the most significant factors that keep startups from filing patents is cost. Filing a patent in India involves a pre-filing cost priced between $920 and $1530, a first-action cost of up to $2300 followed by a patent maintenance cost of another $2300. The collective fee of filing a patent can be a burden on several early-stage startups so private IP firms are helping startups manage these costs.

Bangalore-based BananaIP is one such firm that bears the expenses of patent filing for select startups. In addition, if a startup offers equity, BananaIP also takes care of a nominal patent filing fee to be paid to the government. Dr. Kalyan C Kankanala, senior partner and chief IP attorney at BananaIP, says, “Several startups don’t prioritize patent filing as an early stage activity. It’s important for them to understand that once an idea or product goes public, the possibility of acquiring a patent is lost under most circumstances.”

Startups Seize Patent Filing Opportunities

Vicara’s Satish and his cofounder started off by approaching IP Dome Strategy Advisors, a Chennai-based law firm that assists startups with filing patents. While anyone can file a patent, it is recommended to seek the help of IP law firms, which conduct patentability analysis to verify the authenticity of an idea and suggest amendments in patent documents. Based on findings by the Indian Patent Office, the process of filing patents in India has improved of late. Applications went up by 10% last year compared to the year before, and growth has been credited to the improvement of online services, availability of IP specialists across the country as well as the incentives provided for startups under the government’s Startup India initiative.

IP Dome has been supporting the government’s Make In India initiative by educating startups on the value of intellectual property, as well as the strategic use of intellectual property to gain a competitive advantage in the global marketplace. Swapna Sundar, CEO of IP Dome Strategy Advisors, says, “An increasing number of product startups in India are embracing the need for filing patents at an early stage of product development, which is very sensible. The Indian government’s Startup India initiative is creating awareness towards minimizing legal risk against IP infringement.”

Startups Receive Incentives For Filing Patents

The rising awareness around patent filing is having a positive impact as more startups are investing in onboarding good IP lawyers at initial stages of commercialization of their product. Kankanala says, “About five years ago, we would do about five to six patent filings a year. This year, we have already filed about 20 patents for startups, and expect more.” Sundar stated that IP Dome is witnessing an increased growth in IP awareness as well as filings this year. “We have helped around 35 startups in building successful IP portfolios for their businesses,” she said.

In addition, the government’s Startup India initiative provides a slew of benefits to Indian startups, which includes an 80% rebate on patent filing. Application fees for startups to file patents has been reduced to just $25. The Indian government has introduced mechanisms for speedy processing of patent applications, and it’s now possible to acquire a patent in India within a year of its filing. Unlike earlier, the Indian Patent Office is processing foreign filing permits quickly, with which Indian startups can now file patents overseas.

Lawyers recommend startups file a patent application in India first as it is cost-effective and provides priority rights for international filings. Once a patent application is filed in India, the startup can either file directly or opt for a Patent Cooperation Treaty (PCT), which provides international patent protection. "Opting for a PCT grants the startup at least thirty months to perfect the product, test the market, and/or raise funds to file in other countries," says Kankanala.

Protected Ideas Lead To High Investor Confidence

The eagerness to file patents has also led to improved investor confidence. Having seen both the sides of the ecosystem, Sateesh Andra, an entrepreneur-turned-venture capitalist with Endiya Partners believes that patent filing is an integral part of the overall product strategy as benefits outweigh the timelines and costs involved. The owner of multiple patents himself, Andra says, "As startups go global, how quickly you go to the market is paramount. Entrepreneurs must be aggressive in their market outreach plan as patent filing not only increases the credibility when they scale but also bolsters investor support."

As awareness around patent filings and quality of legal assistance improves, startups can now push the boundaries of innovation and creativity in India, establishing new benchmarks in the fast-growing ecosystem.

Source >> https://www.forbes.com/sites/sindhujabalaji/2017/10/16/indias-startups-are-filing-more-patents-than-ever-before-heres-why/#68a17c069f57

What Does A Patent Lawsuit Cost ?

By: Michael J Foycik Jr. 
August 23, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Patent infringement is a highly charged subject, and I have seen how it affects the patent owner.  A lawsuit would seem like a wonderful solution.  But, what should it cost?

Though I have heard many numbers, it is all just hearsay.  Even so, it may be helpful to say it.

A contingency attorney might take the case, but may require an ownership interest in your company of 50 percent or higher.  Is it worth it?  Maybe so, if that's the only way to go forward.  And why the high ownership interest?  Easy – to have control to ensure payment in event of a victory.

A very small law firm or individual attorney will often charge less than a large firm.  I have heard stories wherein a plaintiff might pay somewhere between 20k and 60k, depending on if/when it settles.  Higher numbers are possible when it goes to trial and there are many issues.   Is this a good value?  That depends – if you can only afford that much, then there's simply no choice.

A big company practically must use a large law firm for its reputation and size.  There is great variation, but one should expect to pay for that large size and reputation.  I have heard a number of experienced litigators say to simply add a zero to the numbers used for a small law firm.  Is it worth it?   That depends, but I have seen examples where it was well worth having a large firm do the litigation.

Where's that money go, anyway?  Well, a portion goes to filing or answering the Complaint; attending to discovery and motions related to discovery; depositions and court reporter costs; various court hearings where attendance is required; and finally for the trial itself (if it goes that far).

Read More >> http://internationalpatentservice.com/What-Does-A-Patent-Lawsuit-Cost.html

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.

Searching for a law school? Get our complete rankings of Best Law Schools.

Tags: law school, education, careers, intellectual property, students

Source>> https://www.usnews.com/education/best-graduate-schools/top-law-schools/articles/2017-09-28/identify-the-right-law-school-for-an-intellectual-property-law-career

Patent Application – What to Expect After You File One

By: Michael J Foycik Jr. 
June 21, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

So you're an inventor with a patent application!  What happens now that it has been filed with the US Patent Office?  Here's what to expect.
First, you'll get your Official Filing Receipt – it is actually pretty important.  Sure, you'll get an electronic filing receipt if you filed it online.  But, that's not what matters.  The Official Filing Receipt is the easiest and fastest way to get your foreign filing license.  And you'll want that, if you ever intend to file in other countries and need your US priority date.

If the US Patent Office has any objections to the drawings, specification, or abstract, they'll (usually) notify you at the same time they send the Official Filing Receipt.  Formal drawings are the main type of objection – you'll need those.

After a period of time, typically anywhere from six months to two years, you'll get your first Office Action.  That's typically where the patent examiner reads the case, searches for the claimed invention, and applies the prior art to the claims.  This is also where the examiner can make objects, for example objections to claim language, to errors in the specification or drawings, or other things.

The first Office Action could, of course, be an allowance.  Those are not that common.  If your application is allowed, there is an Issue Fee due that varies depending on your inventorship status (micro entity, small entity, or non-small entity).  There is also a publication fee due, too (if the application was published).

Assuming you didn't get an allowance, then you'll have the option to respond to the First Office Action.  Typically, your Response would meet any objections by amending the offending parts.  And, your Response typically would provide remarks in support of patentability, such as explaining how the invention as claimed differs from the applied references.  Your Response likely will also include an amendment to the claims to recite a feature not found in the applied reference, and this is one way to overcome an applied reference. 

Read More >> http://internationalpatentservice.com/What-to-Expect-After-You-File-One.html

Why Do Indian Startups Fail?

By: Khushi Poddar

“Bangalore based fintech start up Finomena shuts its shop after it fails to raise series-A funding.”

This is the recital of just one of the 11 major startup shutdowns that happened in 2017. Despite India’s entrepreneurial strength, 90% of Indian start-ups fail within five years of its inception. Reasons, one may ask?

The start-up India campaign initiated by the Indian Government is still trying hard to get its nuts and bolts in place. The big chest worth of INR 10,000 crores stole the headlines and highlights of the previous year. According to it, SIDBI was to invest in the venture capitalists, which were to in turn invest in start-ups. Not a single rupee got disbursed. The blemish caught later on was that the bank puts in only 15% of the total corpus, while the VCs have to fetch in the remaining 85%.

By tweaking the definition of start-ups to a venture of 5-7 years, with an annual turnover not exceeding INR 25 crores in any preceding financial year, the government has linked employment generation and wealth creation plans to it. Instead of this acting as a boon, it has become a hindrance for start-ups as most entrepreneurs limit cost of resources by reducing manpower. The strict definition of Start-ups by the Indian government recognised only 502 out of 1368 applications as start-ups. An even smaller number- 111, was considered for tax benefits.

Moreover, tax benefits are really illogical because they specifically assume that the start-ups make profit in their first three years. Statistics, however, point out that only a small percentage of start-ups succeed at all, let alone make profits so early.

Also as a result of the government of India introducing policies to support FDI, several huge MNCs having large amounts of capital come and operate in India, snatching the opportunity from small Indian entrepreneurs.

All these operational issues only provide a hostile business environment, instead of an enabling one.

Let’s relate now to the well-known cash-crunch. Finance, to young start-ups comes mainly through VCs and angel investors. Many companies who have what it takes to make it work fail to get funding through VCs because the investment process is a complicated one and potential companies are vetted out thoroughly.

Another angle of discouragement is that the average VC stake is around 35%. When in the initial tender period of business, start-ups struggle to simply survive, providing such a high stake is irrational and completely out of question. Crowdfunding (providing finance to start-ups through audience engagement), is a blooming concept in the foreign countries but has not set sail yet in India.

Also, a study suggests that if a VC invests Rs. 100 in start-ups, then in a couple of years, the investor gets Rs. 700 in Israel, Rs. 500 in the U.S., but only Rs. 110 in India. Taking into account service companies and rates of inflation, there results a net loss to the investor in India. Why, then, would he want to invest in Indian start-ups.

Read More >>  http://edtimes.in/2018/02/why-do-indian-startups-fail/

Why Worry About Infringement – Things To Do First

By: Michael J Foycik Jr. 
June 3, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

You've seen the topic of patent infringement in the news.  Should you be worried?  If you are, here's some things to do that should minimize your risk.

If your product needs a component that is patented, you have two options.  One is to buy that component from the patent owner or from an official licensee.  Why?  It carries an implied license.  The other option is to contact the patent owner and negotiate a license, in which case fees may be small.

What if there's nothing out there like your product, how will you know if you should worry?  You can do a right-to-use patent search.  This is different from a normal patentability search, because you're not worried about patentability – you're worried about infringement.  In a right-to-use patent search, you will search for patents that are expired, meaning more than 17 years old.  If you can find the component or feature that is of interest, then you can rely on it and have a right-to-use.  For a quick and easy patent search, try going to any patent site that allows searching, such as the official uspto site or Google® patents.

Read More >>  http://internationalpatentservice.com/Why-Worry-About-Infringement.html

INTELLECTUAL PROPERTY TAILWINDS CONTINUE TO FAVOR SECTION 337 ENFORCEMENT ACTIONS BEFORE THE INTERNATIONAL TRADE COMMISSION

By: Jon Redway 

Section 337 intellectual property enforcement actions before the International Trade Commission (“ITC”) continue to gain in popularity.

The ITC has long been a popular forum for private parties seeking to enforce their intellectual property rights and stop the importation of infringing goods into the United States.  It is easy to see why.  The ITC is particularly well-known for fast proceedings. Most investigations are concluded within a year while a good many are completed in even less time.  The ITC is also utilized because of its powerful exclusion order relief.  Products found to infringe intellectual property rights are excluded from entry into the United States.  The ITC also permits broad discovery of accused infringers and is quick to level sanctions on any party that refuses to cooperate.

Recent legal developments are raising the popularity of ITC actions further.

In a case of first impression, the United States District Court for the Eastern District of Wisconsin recently ruled that findings by the ITC in trade secret misappropriation claims enjoy preclusive effect in parallel District Court litigation.  See generally Manitowoc Cranes LLC v. Sany America Inc., 2017 WL 6327551 (E.D. Wisc. 2017). While this has long been known for other types of enforcement actions, such as trademark infringement, clear legal authority now exists for the first time in the area of trade secret misappropriation.  The broad scope of discovery available to Complainants through ITC proceedings, coupled with the enhanced sophistication of the Administrative Law Judges, cannot help but increase the chances of success, and, if desired, such success can now be carried forward efficiently in a subsequent District Court action.

In addition, the United States Supreme Court in combination with recent Federal Circuit authority have severely limited the geographic locations where a patent holder may file to enforce its patent rights.  See generally TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017); see also In re Cray Inc., 871 F.3d 1355 (Fed. Cir.  2017).  Today, a patent holder may bring an enforcement action in the geographic locations where the defendant is either (1) incorporated or (2) infringes the patent and maintains a brick and mortar business.  Unfortunately, this means a good number of patent holders can no longer enforce their patents in a home or “patent friendly” forum.  The ITC remains available as a “patent friendly” and home forum to any party who has a domestic industry within the United States, regardless of whether such party is a U.S. or foreign entity.

Third, many District Court actions are stalling in the early stages as the Patent Trial and Appeal Board, under the America Invents Act, reviews petitions for patent review and, in the majority of cases, conducts a separate trial.  See generally Lex Machina, 1/23/18.  Unlike District Courts, the ITC thus far has been unwilling to put its investigations on hold when an accused infringer challenges an asserted patent at the Patent Trial and Appeal Board.  See generally In re Certain Network Devices, Related Software and Components Thereof (337-TA-945) (August 16, 2017).

Finally, a successful patent holder before the ITC can be confident that accused product will be banned from importation into the United States.  In contrast, a successful patent holder in District Court may or may not obtain an injunction depending on whether or not the equities — as evaluated by the District Court – demonstrate that money damages are not adequate to compensate the patent holder.  See generally EBay Inc. v. MercExchange, 547 U.S. 388 (2006).

Now, more than ever, intellectual property holders harmed by the importation of infringing goods should look to the ITC to protect their rights and businesses against the harm of infringement.

Source >> http://iplitigationblog.dickinson-wright.com/2018/02/13/intellectual-property-tailwinds-continue-favor-section-337-enforcement-actions-international-trade-commission/

Costly Misconceptions About Trademarks

By: Michael J Foycik Jr. 
June 8, 2013 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Getting a trademark is a great idea, but things may not be that simple.  There are some misconceptions that can cost time, money, or even loss of rights.

One common misconception is that a registered trademark is necessary to have enforceable trademark rights.  We are all familiar with registered trademarks – the kind with the ® registration symbol.  But, trademark rights normally arise from actual use, even for unregistered trademarks.  State courts can enforce such rights arising from actual use, even in the absence of a federally registered trademark.  No registration, no problem – sometimes.

Getting a registered trademark requires filing a trademark application.  Choices need to be made right at the start: actual use or intent-to-use; type of goods/services; logo or word mark.  These choices can have profound consequences.  Even the U.S. Trademark Office recommends having an experienced trademark attorney help with those choices – you'll see the warning for that in the online trademark  application filing forms and elsewhere.

Actual use sounds better than intent-to-use.  Maybe so - unless there is a conflict with another trademark filed on an intent-to-use basis.  Then, surprisingly, the owner of the intent-to-use to application is permitted to introduce evidence of events that show an intent-to-use that has occurred before the application's filing date.  The actual-use applicant does not have the same rights.  Such evidence of intent-to-use can be scant: a mere mention at a business meeting, or an order for design of the mark, for example.  This is peculiar to federal trademarks; state courts can apply their own standards and might well decide specific cases differently.

Choice of goods/services is important: more is better, right?  Not so fast.  Listing multiple catergories is all good and well, until you have to prove actual sales.  Sure, a Statement of Use might work with the U.S. Trademark Office, but at a cost: forfeiture of rights if untrue.  When it comes time to enforce your trademark rights against an infringer, it may become necessary to have proof of use in specific categories of goods.  Listing a few categories of goods is fine, and once you get your trademark registered your future use in other categories will allow you to file further trademark applications for those additional uses.

Read More >> http://internationalpatentservice.com/Costly-Misconceptions-About-Trademarks.html

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.]

Read More >> https://www.usnews.com/education/best-graduate-schools/top-law-schools/articles/2017-09-28/identify-the-right-law-school-for-an-intellectual-property-law-career

Three Things You Should Look For In A Patent Attorney, With Handy How-To Guide

By: Michael J Foycik Jr. 
June 3, 2013
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Getting a patent attorney or patent firm?  Get the name of the individual attorney who will personally do the work on your case.  You'll wish to know whether the patent attorney is registered; is qualified in the relevant technical arts; and has a successful track record.  The following explains how.

Why do we care about this?  Because once a patent application is filed, it will be examined by a patent examiner.  Most applications receive an official action with some kind of rejection or objection.  Many such rejections and objections can be overcome, some more easily than others.  Not every patent application is allowed, and therefore the skill of the individual patent attorney comes into play.  The patent attorney must be capable of making convincing legal and technical arguments in support of patentability.  And, the patent attorney must be skilled at claim drafting: amending a claim skillfully may overcome a rejection or objection.  Failure to skillfully respond can result in greater expense and may fail to result in obtaining an issued patent. 

Is your attorney/firm experienced, with many good results?  Since the attorney or law firm name is printed on the front of issued U.S. Patents, you can easily find out what type of patents they handle, and how many have issued.  You can find out by using the patent search feature on the site www.google.com/advanced_patent_search; type in the name of the attorney in the top blank.  It should find all issued patents with that name in it.  You can do this more precisely at the official U.S. Patent Office site www.uspto.gov, by going to that site and in the upper right corner click the button “search for patents” where you'll get several databases to choose from.  Select the first one, and a search box comes up allowing clicking on the “all fields” button and changing it to “attorney or agent.”

Read More >> http://internationalpatentservice.com/Three-Things-You-Should-Look-For-In-A-Patent-Attorney.html

How Intellectual Property Works

By: THOMAS L. PETERSON

The phrase intellectual property (IP) refers to the bundle of legal rights that arise from the creative genius of the human mind. IP rights play an important role in the economic prosperity of a country and serve as a motivating force for creative individuals to share their genius with society. Like real and personal property rights protect one's ownership interest in tangible objects, such as land and automobiles, IP rights protect one's ownership interest in intangible objects, such as the idea behind an invention, the music score for a Broadway play and the name or logo used to brand a product. Without enforcement of these rights in the law, it would be difficult for society to prosper and grow. In this article, you will learn what intellectual property rights are and the differences between its various forms.

When most people think of intellectual property rights, patents, trademarks and copyrights come to mind. This core set of IP rights reward and protect the creative works of inventors, authors, owners and sellers of goods and services in the marketplace. While the legal principles that underlie each of these rights are distinct, they each share a common set of principles.

An award of patent, trademark or copyright protection requires a delicate balance between the interests of the inventor or author and the interest of society as a whole. This balance is very much like the tradeoff required by zoning laws, which attempt to protect the ownership interest and exclusive right to use that a land owner has with society's interest in the limited use of the owner's land for society's greater good. Public utility easements and right of ways are examples of this balance.

The grant of a patent on an important invention of a lifesaving drug represents a similar set of tradeoffs. Is it fair to the inventor to allow society free access to the patented drug? Is it fair to society to be denied access for its greater good? It is the role of intellectual property law to harmonize these seemingly conflicting interests.

Intellectual property rights also foster a competitive marketplace. They do so by encouraging disclosure of innovation through protecting the fruits of that innovation for a period of time. Disclosure allows others to build and improve upon prior innovation so that the state of the art continues to evolve and develop. Without the benefits provided by intellectual property protection, the market place would not operate as effectively. Imagine what the world would be like if every competitor had to continuously "reinvent the wheel" rather than being able to refine and improve upon the works of others.

Finally, intellectual property rights are regional in nature and the conditions of their grant and enforceability are governed by the laws of each jurisdiction. A U.S. patent can be only granted and enforced in accordance with the laws of the United States. A trademark can only be registered and enforced in Canada in accordance with the laws of Canada, and a copyright can only be registered and enforced in Mexico in accordance with its laws. While there is a desire to be somewhat uniform and consistent, countries have different approaches to intellectual property rights protection. Variations in the procedure for obtaining IP rights account for a large percentage of these differences, rather than the differences in the substantive rights granted in each country.

The words "patent" and "trademark" are often used interchangeably. Many times, we hear that a patent is used to protect a logo and that a trademark is used to protect an invention, and vice versa. While patents and trademarks may be associated with the same product, the two words have very different meanings and refer to very different forms of intellectual property rights. They can seldom be used interchangeably, as the underlying rights that each protects is quite different in nature.

Read More >> https://money.howstuffworks.com/intellectual-property.htm

Get a Patent, Sue Competitors – Can it Really be that Easy?

By: Michael J Foycik Jr. 
May 27, 2013 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

True, a patent confers a sort of monopoly.  Also true, one of the intentions of patent law is to reward an inventor with a competitive advantage.  But, exactly what does that mean, and is it that easy?

Patent rights are defined by their claims.  A competitor infringes a patent if their competing product has each and every recited element of at least one claim of the patent.  That competing product will still infringe if it has more elements, but not if it has fewer than recited in that claim.  Sometimes, an element in a patent claim can be stretched a bit by a court of law, to cover equivalent structures.  So far, so good.

But, there are defenses to allegations of patent infringement.  For example, the competitor might be able to show their product is the same as that shown by an expired patent.  So, expired patents can provide protection to your competitor, since once a patent expires it becomes part of the public domain.  Other defenses may also arise from a competitor's own prior patent.  Or, the competitor may be able to invalidate your patent, for example based on other prior art or issues of fraud.  Just owning a patent might not be enough in these cases.

Let's say your competitor does infringe, has no valid defenses, and cannot invalidate your patent.  Great, right?  Not so fast – patent litigation costs real money, sometimes big money, so if you sue it has to be worth it.  Small time infringement would likely result in very small damages, and your litigation costs could easily exceed the damages you recover.  It may pay to wait until damages have mounted, or it may be necessary to simply overlook small or token infringements.

Read More >> http://internationalpatentservice.com/Get-a-Patent-Sue-Competitors.html

A Practical Guide to Startup Funding

By: Irwin Stein & Gene Quinn 
February 5, 2018

You have done everything right. You’ve invented a new, exciting and potentially revolutionary technology. You’ve responsibly filed patent applications on your innovations along the way, securing early priority dates with solid, thorough, comprehensive filings. Now you are at the edge of success – if only you can acquire the funding you need.

This is where venture capital comes into play, at least in theory. But technology VCs can be fickle (to put it politely). What is hot one minute is not the next. Today some are predicting that many tech companies will soon choose to relocate to China, which in 2016 saw as much venture capital investment as in the United States (approximately $50 billion according to Silicon Valley Bank), and where VCs are far more willing to fund an array of projects largely due to the massive commercial marketplace.

What if your startup is a university startup based on university developed and patented technology? The goal is not only to create a domestic corporation, but also to create a local corporation that leverages university technology. While there will be many trials and tribulations, if successful that university startup will benefit the entire region, bring high paying jobs to the community, return capital to the university to further research efforts, and continue to allow professors to teach and students to learn on the cutting edge of technological innovation.

Moving to China isn’t an option for a university startup, regardless of the technology and likelihood of attracting funding from venture capitalists. Similarly, many other technology companies simply can’t, or won’t, make the choice to chase money to China. Still with investment for Internet of Things (Iot) softening and hardware companies finding themselves largely out of options, many tech startups must become more creative.

Equity Crowdfunding

Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for startups and small businesses to raise capital.

In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.  It is also less expensive than hiring a brokerage firm. Although direct to investor funding over the Internet has been around almost a generation, it became much more feasible (and popular) with the JOBS Act of 2012.

The JOBS Act provides for three regulations that govern distinct types of offerings. The offerings differ by how much money you can raise and from what type of investor you can raise it from. First, Regulation A (Reg. A) permits offerings of up to $50 million dollars from any investor. Second, Regulation Crowdfunding (Reg. CF) allows companies to raise up to $1,070,000 per year directly from the general public. Finally, Regulation D. (Reg. D) allows companies to advertise and solicit investments from accredited investors (i.e., those whose income is over $200,000 a year or possess over $1 million in assets outside of their primary residence). Reg. D has become the primary vehicle for companies seeking to use crowdfunding.

Read More >> http://www.ipwatchdog.com/2018/02/05/practical-guide-startup-funding/id=93257/

What Happens After Filing a Utility Patent Application

By: Michael J Foycik Jr. 
May 19, 2013 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

One of the important but little-discussed subjects for inventors is what happens after filing of a Utility Patent Application.  Here's a brief guide.

Initially, the US Patent Office studies the application papers for formalities.  These formalities include such things as the signed forms, whether the drawings are sufficiently formal, whether specification required information is provided, and so on.  If any problems are found, a Notice is sent to the applicant, and a period for response may be set for those problems that can be corrected. 

The next stage is the patent examination itself.  This is where the patent examiner takes up the application for study.  Usually the patent examiner is an expert in the subject matter of the application.  The examiner will search the prior patent art, including patent publications, to locate the most relevant references to the invention as described in the claims.  The result of this will be a first Office Action, which is usually a statement of objections and rejections, but can sometimes be a first action allowance.

The applicant can respond to the first Office Action, and is normally given a set period of time to do this.  The response can include changes to the specification, drawings, and/or claims.  Such changes are usually to overcome objections and/or rejections, and to further emphasize the novel features of the invention.  Additionally, the applicant can provide remarks in support of patentability.

Of course, many other things might occur beyond those described above.  Those are less common, and though important, are not discussed in detail herein for the sake of brevity.  A short and incomplete listing is: restriction requirements, election requirements, statutory double patenting rejections, and/or non-statutory subject matter rejections.

Read More >> http://internationalpatentservice.com/What-Happens-After-Filing-a-Utility-Patent-Application.html

The ABCs of China Design Patents

By: Matthew Dresden

Design patents are increasingly becoming an essential component of our clients’ China IP portfolios. They’re reasonably priced, don’t take that long to acquire, and provide pretty good protection.

That said, it’s important to understand the limitations of a design patent. A design patent does not provide protection for a product’s functionality or inner workings. It does not protect a product’s manufacturing process. It does not even protect the materials or components used in a product. The only thing a design patent protects is the external appearance of a product. For this reason, the application for a design patent is short and sweet, with the substantive parts limited to orthographic drawings of the design and a brief description.

The main reason design patents can be acquired with relative ease in China is that they are not substantively examined. China’s State Intellectual Property Office (SIPO) only examines design patent applications to confirm that the drawings and description meet formal requirements, i.e., adequately describe the design. SIPO does not search to see if the design is the same as or similar to prior art. That sort of examination only takes place if the design patent is challenged.

Like other patents, design patents in China have a requirement of absolute novelty. If you have already disclosed or commercialized a product anywhere in the world, it is not eligible for design patent protection in China. This is a marked difference from trademarks, which can be registered at any time regardless of when use actually began. To be sure, it’s almost always a good idea to file a trademark as soon as possible, even before use. – it’s just not legally required. Design patents are also different from copyrights, which are protected at the time of creation even if they’re never registered. This disjunction can be confusing, especially when aspects of a design could (theoretically) be covered by multiple forms of IP. For certain products, the appearance of the product itself may be protectable under trademark, copyright, and patent regimes. That is rare, but it can happen and it lulls some of our clients into forgetting that though they are legally allowed to wait on filing a trademark or copyright (no matter how often we tell them not to wait) if they wait too long to file a patent they may be legally barred.

Read More >> https://www.chinalawblog.com/2017/11/the-abcs-of-china-design-patents.html

Myths and Misconceptions About International Patent Applications

By: Michael J Foycik Jr. 
May 9, 2013 
The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

Wondering about filing an international patent application?  There are some myths and misconceptions about international patent applications, including what that phrase even means.  Let's talk about that.

Myth: an international patent application can be filed that, when granted, turns into a patent giving patent rights in all countries.  Fact: there is no such thing.  This is probably the biggest patent myth.

Misconception: a PCT application is like a US patent application, and can turn into an issued patent.  Fact: a PCT application is more like a bookmark in time, holding the date for other, later applications called “national stage” applications.   A short explanation about PCT applications is in the following paragraph.

Most would think “PCT application” (Patent Cooperation Treaty application) when talking about international patent applications.  Yet it is not a traditional application in the usual sense of that word, and so is a little tricky to understand.  A PCT application is like a US patent application in some ways: it grants “patent pending” status; it confers rights to its filing date as a priority date for filing other patent applications; and, it grants a period of time in which to file other patent applications.  However, it is unlike a US patent application in that it does not directly mature into a patent, and the time period conferred is different.

Misconception: a foreign patent is equivalent to a US patent.  Fact: the protection afforded by a granted patent differs widely among countries.  For example, a US patent confers protection that is considered very broad, and legal rights are as strong as other property rights.  In some countries, a granted patent may have little practical value, or may be costly to enforce, or may only cover what is specifically shown and not variations.  It is important to know the legal rights conferred in a specific country, before filing a patent application there.

Read More >> http://internationalpatentservice.com/Myths-and-Misconceptions-About-International-Patent-Applications.html

This outfit wants startups to trade equity for patents from big tech players

By: Connie Loizos 

Aqua Licensing is a four-year-old patent advisory and transaction firm that typically works behind the scenes, helping companies sell their patents for a variety of reasons. But it has a new proposal for venture-backed startups that are in fundraising mode: it wants them to give big tech companies like AT&T and Lenovo some of their equity in exchange for patents that the companies no longer use but could prove useful for the startups.

Put another way, it wants to create a two-sided marketplace that helps big corporations find stakes in more startups, while also pushing startups to think from an early age about their patent strategy.

The initiative makes some degree of sense. As companies mature, they often need to think more about patents as a way to protect their business. (If a company has a patent on a product or service or idea, that’s one less patent an outsider can acquire to assert against it.)

Of course, it’s also easy to imagine the many obstacles to it working, starting with startups’ priorities. “This relies on startups thinking proactively in the early stages about a need for patents,” notes Greg Gretsch, a longtime venture capitalist and a co-founder of Jackson Square Ventures in San Francisco. “In my experience, that’s generally not top of mind for founders, and if you told them it would cost them equity, they’d probably be even less interested in engaging.”

Late last week, we talked with Aqua founder Mark McMillan to learn more about how he sees this working, and why he thinks Aqua can overcome some of these challenges. Our chat has been edited for length.

TC: You’re trying to match startups with patents or defensive patents, saying it will help them protect their innovations, as well as help them scale. What was the impetus for the idea?

MM: We were working with a major client last year and a discussion came up around the challenges of selling IP assets into startups. The startups don’t have a lot of cash to buy them, and VCs don’t necessarily want them doing strategic transactions that are ancillary. Meanwhile, the patent market is growing and people — companies — find themselves with assets that may be depreciating in value and costing them maintenance fees.

TC: What are some of the big companies that you’ve signed up to this exchange program?

MM: We’re announcing Lenovo, Rambus and AT&T today, but we have a large collection of participants that are prepared to sell to the right startup at the right price.

TC: How does this process work?

MM: Startups will submit their investment plan to us, just like they would to VCs. We have analytics capabilities that will help them find appropriate assets.

TC: Given these are young companies, how can you really know what patents make the most sense for them?

MM: We start by assuming a company has started working on its own unique patents, and get a read on the competitors it’ll be disrupting. If we can find patents that likely read on these competitors, the startup’s business plan then goes to the participating member (with the relevant patents). If that member is interested in the startup and would like to sell its patent in exchange for equity, the member then values its patents and lists a price that the startup can accept or reject.

A final closing condition has to be the closure of a qualified venture funding round and [the big tech company’s] commitment to invest the proceeds of [that patent sale] into that round. It also has to give the startup at least 90 days to complete the funding round. After that, the [big tech company] gets the same terms as the VCs in the round and becomes a minor syndicate player, and the startup gets full ownership rights to the IP assets.

TC: Some startups may scoff at the idea of giving a big tech company so much information about their business, when they don’t know at the outset that they’ll want its patents.

MM: Some have asked for NDAs already. We can tell them who we’ve matched to them before we send off their business plan.

TC: And if the startup doesn’t want to do a deal anyway, because maybe the price isn’t right? Do they then need to worry about those patents being used against them in some way?

MM: The patents in the pool are for sale. The companies aren’t looking to assert these assets. If they don’t accept the offer, nothing happens.

TC: How do the companies establish how much their patents are worth?

MM: They have internal methodologies. They also look at what other assets have been [fetching] in the market.

TC: How are you paid?

MM: We receive a transaction fee from the seller of the asset based on the value of the asset.

TC: How many patents are available to you right now?

MM: 60,000 as of today; we have two other big companies coming online that we haven’t announced that will [bolster that amount].

TC: Other than through press stories like this one, how do you plan to get startups into this marketplace? Who’s going to help you convince them they should do this?

MM: We definitely have to educate startups that this is available to them. We’ve spoken to many VCs and CEOs and investment banks and private equity funds, and there’s a general sense that a strong patent portfolio adds value to a startup. We see these patents as immediately accretive, too. It gives them defensive insurance and probably increases the value of their business as they are raising venture funding.

TC: How much ownership of the startups are these big companies expecting to get in exchange for their patents?

MM: It will be a fairly small level of participation. It depends in part on the company’s age. We’re looking to participate in venture-structured rounds — so we’re not talking about seed-stage companies but rather companies that are assembling A and B and C and D rounds. Most of the [big tech companies] want to cap their participation at 5 to 10 percent of any round, and it could be less, depending on the asset.

TC: You mentioned that some patents are depreciating in value. Is there a larger trend at play here?

MM: Patent [values] are down. There are a lot of assets out there. There’s some decent value out there for acquiring IP, but patent reform [is having an impact on] non-practicing entities [also known as patent trolls], who are less active right now.

Large companies are looking for operating companies to place their patents versus [selling them] to non-practicing entities. It’s a much safer place to divest their assets.

TC: I’m guessing this isn’t the first attempt to create this kind of marketplace.

MM: There have been other attempts at creating defensive patent pools, but they’ve involved giving up rights to check a book out of a library instead of own it, whereas this is a patent sale for equity.

This is new, this takes scale. We’re going to try to break down barriers to make this ecosystem work.

Source >> https://techcrunch.com/2017/08/02/this-outfit-wants-startups-to-trade-their-equity-for-patents-from-big-tech-players/