Best Practices for Design Patents- Conclusion

By Debby Winters

We have discussed various aspects of design patents in this series of blog posts. In short, design patents should be considered to provide an alternative or additional means of protection for an invention, and generally have a lower cost, higher allowance rate, and faster timeline than utility applications. The guidelines outlined in this series should be considered when preparing an application for an ornamental design. However, you should always consult with a licensed patent attorney before moving forward with your application. We would be happy to serve as your patent attorney. Good luck!

Best Practices for Design Patents- Include Additional Embodiments

By Debby Winters

To continue our series of blog posts on design patents, in this post we will discuss including additional embodiments.  Similar concepts with slightly different modifications, such as certain features being shown in solid and broken lines, are considered additional embodiments and could be filed in the same application. The potential outcome of including additional embodiments in a design application that does not exist in a utility application is the potential for receiving a restriction requirement.  The Patent Office may or may not issue a restriction requirement, depending on how closely related the designs are. The subjectivity will also depend upon the particular Examiner assigned to your application. Including different embodiments allows different levels of protection for the same invention. There is no downside to including embodiments of different scope in the same application. The Patent Office will issue a restriction if warranted, and subsequent divisional applications can be filed that are directed to the restricted embodiments.

Alternatively, an Appendix including additional or related embodiments may be filed in the application. The Appendix will serve as support for future drawing amendments or continuation applications and should be canceled by the Examiner upon allowance of the application.

What Every Startup Needs To Know: IP Pitfalls- Poorly Written Or No Agreements- Part Nine

By Debby Winters

Using poorly written agreements or no agreements at all can be a disaster for the startup. Not only is the valuation of a startup based on the IP that it owns, but also on the agreements with IP clauses. Examples are not just limited to things you typically think of as IP agreements but can include employment, consulting, funding, collaboration, settlement, licensing, research, and material transfer agreements. Thus, poorly drafted or non-existent IP-related agreements can be problematic for a startup.

Because of a lack of sufficient funding, many startups attempt to save legal expenses by using template IP-related agreements from a variety of non-professional sources, including the internet. However, such agreements can fail to include clauses that adequately protect the startup’s interest and in many cases, can include clauses that jeopardize a startup’s IP. Thus, when using IP-related agreement templates, the startups should have such agreements at the very least vetted by IP professionals. Startups can also do themselves a disservice by using an attorney who is not familiar with the nuances of IP law.

Many IP-related agreements, particularly research agreements, generally include confidentiality, publication, and IP clauses. The startup should review confidentiality and publication clauses to ensure that confidential information, including trade secret information, is protected from disclosure and that the startup has the right to review manuscripts and other materials containing confidential information before publication. With respect to the IP clauses, the startup should make sure the language allows for retaining its own IP and for protecting jointly developed IP.

Furthermore, with respect to patent license agreements involving a third-party licensor, startups need to make sure that the license agreement provides all the rights needed to commercialize the licensed technology, includes future improvements to the technology, and retains the right to sublicense the technology. The agreement should also have a sufficient termination clause in the event the startup needs to opt-out of the agreement.  The agreement should also specify the relevant field of use and possibly other fields for future expansion. Importantly, the startup should review patents to ensure that the commercialized product materials, methods, and tools are properly claimed with patent life remaining. This should be drafted and reviewed by an experienced IP attorney.

In conclusion to the series of blog posts dealing with common IP pitfalls for a startup, the process of bringing a new startup business to life and in launching new products to the marketplace can be an exciting time. However, many startups are so focused on bringing a new product or service to market that they fail to take the necessary steps to protect the associated IP. Failure to put an IP plan in place can cripple valuation and expose the startup to potential third-party infringement risk. In contrast, startups can protect and exploit their IP assets to build value and revenue by developing an IP plan as part of their conception, creating an action plan to protect IP assets including protection of confidential information, securing ownership rights to the IP, conducting freedom-to-operate searches, and ensuring properly drafted IP-related agreements are in place.

If you need help with your IP or with protecting it, let me know.

What Every Startup Needs To Know: IP Pitfalls- Failure to Identify Third-Party Rights- Part Eight

By Debby Winters

Next in this series, we will discuss the failure of the startup to recognize thrid-party rights. When we think about third-party rights in the IP, we are thinking about competitors who may have a patent for a technology within a product. Every startup should be cognizant that its company commercialization may be blocked by this type of third-party right. Accordingly, startups, at an early stage, should consider a “freedom to operate” (FTO) search or clearance to assess litigation risks. A FTO is performed to make sure that commercial products, marketing and use of the product, process or service do not infringe the IP rights of third-parties.

An FTO analysis begins by searching issued patents or pending applications and obtaining a legal opinion from a licensed patent attorney knowledgeable in that field as to whether the product, process, or service may be considered to infringe one or more patents owned by others. Patents that limit the startup’s FTO can be addressed by buying or licensing the underlying technology or patent, by cross-licensing the technology or patent, or by creatively “inventing around” the patented invention by altering the startup product or process, thus avoiding infringement.

An example of how to “invent around” would be in software development, where a startup chooses to incorporate open source software into its code. However, open source licenses also need to be carefully reviewed to ensure compliance with license terms. In some instances, the use of open source code in a startup product may transform the startup’s proprietary code into open source software resulting in public disclosure of the proprietary code. It is always best to consult a licensed patent attorney.

A startup will sometimes use third-party photographs, images, or text in marketing or product support materials. In such cases, the startup should investigate if permission is required to use the material, identify the rights needed, and contact the owner for permission or a license. Startups should make sure the copyright permission or license agreement is in writing.

Comprehensive trademark searches should be conducted early in the business planning process to make sure that the desired business, product, or service name does not conflict with a registered trademark. A startup that fails to conduct a proper trademark search risks receiving a cease and desist letter or even being sued.  This may necessity a need to rebrand after launch and incur the tangible and intangible costs associated with rebranding.

Businesses need broad awareness when hiring new employees, especially those that may have knowledge of competitor’s trade secrets. This is another way to infringe on a third-party’s IP rights.  New employee agreements should include clauses that prohibit employees from transferring or using proprietary information or materials from previous employers. The startup should also verify that the new hire is not subject to any binding non-compete agreements from former employers.

In dealing with third-party rights, startups are well-advised to consider their options at an early stage. In some cases, minor product or service changes, payment of a small licensing fee to the patent or copyright owner, and/or changing potentially problematic trademarks early on and implementing careful employee hiring practices may be sufficient to avoid future disputes and can improve a startup’s chances of attracting business partners and investors to support its business development plans.

In our next blog we will discuss the pitfalls of using poorly drafted agreements to cover IP, and the danger of not using a written agreement at all.

Failure To Establish Clear IP Ownership-What Every Startup Needs To Know Part 7

By Debby Winters

In the last post we examined how independent contractors could try to claim IP rights. In this post we will look at IP rights as it relates to employees of the startup.

The startup eventually will have employees and it is wise to have these employees enter into work-for-hire-type agreements that explicitly confer rights in the works to the startup. That can be accomplished through an employment agreement or through separate agreements.

Additionally, startups should have employees sign confidentiality and invention assignment agreements with clauses that clearly state the obligation of the employee is to assign all developed IP to the startup. Failure to include such assignment clauses can create ownership problems for the startup, especially if the employee leaves the company to work for a competitor or cannot be subsequently located

The agreements should also state that the startup’s confidential information is only for use for the benefit of the startup; require disclosure of ideas, inventions and discoveries related to the agreement or employment; and include a statement of ownership rights over ideas, inventions and discoveries. Recordable assignment of IP rights should be required to show clear ownership of inventions and other IP developed by its contractors and employees.

It is often advisable to get help from an experienced IP attorney in the drafting of such agreements.

We have talked about establishing clear lines of ownership for the startup IP, next we will look at the failure to identify third-party rights.

Failure To Establish Clear IP Ownership-What Every Startup Needs To Know Part 6

By Debby Winters

In the last blog post we looked at how founders and stakeholders can claim IP. In this post we will examine how independent contractors could try to claim IP rights.

Startups often misconceive that hiring a contractor to create work for a business automatically gives the startup ownership rights of the work.  This is not always true and to ensure that the startup does owns all IP created in all startup-funded work, the startup should have independent contractors enter into an independent contractor agreement that states this is the case. Most often the agreement will contain an assignment clause stating that the independent contractor agrees to assign all inventions and IP to the company.

Additionally, startups frequently use independent contractors to create websites, software, marketing materials and prototypes for instance. Failure to implement written independent contractor or consulting agreements with suitable IP clauses that clearly establish the startup’s ownership rights to the IP prior to commissioning the contracted work can be devastating. This is particularly important if the startup plans to sublicense the work to others, make multiple copies of the work for sale, or hire others to modify the work.

Often the startup will agree to allow use for the consultant’s portfolio or work or other limited engagements. These are items open for negotiation between the startup and the contractor.

All agreements should be in writing and signed by both parties. It should be clearly stated that the startup’s confidential information is only for use for the benefit of the startup; require disclosure of ideas, inventions and discoveries related to the agreement; and include a statement of ownership rights over ideas, inventions and discoveries. Recordable assignment of IP rights should be required to show clear ownership of inventions and other IP developed by its contractors or consultants.

While the approach taken with employees of the startup are similar to these, there are some differences so we will discuss those in the next post.

Failure To Establish Clear IP Ownership-What Every Startup Needs To Know Part 5

By Debby Winters

In the last blog post we looked at how the current employer of the founders might try to lay claim to the IP rights of the startup. In this post, we will look at the founders or stakeholders of the startup.

In many instances, multiple stakeholders contribute IP to the startup. As a general rule, IP rights belong to the individual who conceived of an invention or created the work first, absent any agreement to the contrary. Well-crafted written agreements between stakeholders and the startup can ensure all rights are assigned to the startup. For IP created before pre-incorporation, IP transfer via a written agreement, in exchange of company shares or for money, is recommended. If co-founders are involved in the formation of the startup, a founder agreement may be important in ensuring that the startup owns the IP. Such an agreement can prevent issues with respect to a departing co-founder later claiming IP ownership.

In our next blog post we will look at how independent contractors could try to claim IP rights.