For startups: intro to intellectual property and technology law

A few weeks ago, we had the pleasure of presenting our first Introduction to Intellectual Property and Technology Law for Startups lecture for 100 or so of our closest (and newest) friends.  The goal was to provide a high-level overview of the IP issues that startups might consider, how to avoid the traps that await the unwary, and what practical steps a startup could take today.

We divided the evening into two sections and covered intellectual property law—patent, trademark, and copyright—followed by a discussion regarding the new domain space and how to protect brands in a new, larger online space.  For those who were unable to attend (and a sequel is in the works), below is a summary of the high points and questions from the evening.

Software-based inventions are not only big business right now but also a hot and shifting area of patent law.  In just 2013, 302,948 patents were issued with 40,000 of those covering a software-based invention. Even design patents are getting in on the act. Apple hit Samsung over the head with this guy to the tune of more than $700 million, and with that in mind, quite a few people wanted to know how they could avoid running into their competitors’ IP, or even worse, the troll or NPE.

After all, patent infringement is a strict liability tort, and the number of patent infringement suits filed each year is closing in on 5,000.

The key is to look early. Talk to your IP council about whether a patent search is a good idea, and then tailor that search. The low-hanging fruit is out there — patent notices in click-through licenses or web pages, patents assigned to your competitors. A scorched earth search isn’t always necessary, but failing to look can have disastrous consequences.

Looking inward is just as important, and even startups should identify patent-worthy inventions.  You can’t cover everything, so look at what ideas are core to your business, and look at whether patenting those ideas are feasible. Think about what your competitors might do.

Is it worth the investment? Only you and your IP council can answer that after you’ve looked at your business plan, your goals, and the record of what has been patented before — the prior art.  You don’t want just any patent; you want a valuable one. Too narrow a patent leaves money on the table, too broad risks a validity challenge.

A new founder inquired about how to handle employees and their inventions.  On Day One, have your employees sign their rights to inventions that are made on the clock to the company.

The advice for trademarks is similar. Confirm the availability early in the process. You don’t want to invest in graphic design and build goodwill only to realize six months later that the company name needs to change.

Pick a trademark that is distinctive. George Eastman made up the word Kodak because he thought the letter K was strong. You should also consider descriptive marks, which can be difficult to register, if at all (think PARK N FLY airport parking lots).

With copyrights, register your important materials, such as source code and your website design.  Copyright registration is the least expensive of the three main forms of IP, and it still provides serious protection in the form of statutory damages of up to $150,000 per work infringed in extreme circumstances.

When it comes to domains, most everyone is familiar with the .com, .org, .edu system, but a recent plan to open top-level domain market to just about anything (.nyc, .bagel, .music) is catching a lot of people by surprise.

In most cases, even the savviest tech folks had no idea about these new domains, and those that did, hadn’t given much thought to what it might mean for their business—good or bad.

When we asked if anyone had trouble finding a domain name when they started their business, most people raised a hand. Further, almost everyone raised a hand when we asked if their business website was the primary customer facing “storefront.” This is noteworthy because startups struggling to find good domain names will now have more choices, and a good domain name is particularly important for companies that rely on the Internet to engage consumers.

There was a lot a lot of skepticism among the audience about the need for new domains, and whether this would mean businesses need to own multiple domains in order to protect themselves online.  Interestingly enough, these comments echo the protests of big business when the Internet Corporation for Assigned Names and Numbers (ICANN) first proposed opening the “right of the .dot.” More than 100 leading brands sent a letter to ICANN in 2009 slamming the program by stating it would put an undue cost on brand owners and could threaten the health and safety of Internet users. Many of these same brands applied for their own domain registries and are making plans to brand and re-shape their Internet presence accordingly.

To help companies protect themselves and deal with the expanding Internet name space, offers a service that allows companies to register their names and then see who might be trying to steal customers, revenue, or simply trade on the good name of that company. As the saying goes, “It takes years to win a customer and seconds to lose one.”

The new domain space has both opportunity and peril. But navigating it, protecting your business, and taking advantage of this historic opportunity is something every business (from startups to big brands) can do, even on limited resources.  As the new domain program moves forward, it will be even more important for businesses to think about how they can protect themselves in a larger Internet landscape with multiple channels, and how to leverage increasingly popular and useful niche areas for users to search and find what they need from businesses of every size.

Interested in workspace? Get in touch.