Professional Documents
Culture Documents
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Intellectual Property
Includes:
Patents. Trademarks. Copyrights. Trade secrets.
Represents important assets to the entrepreneur. Should be understood even before engaging the services of an attorney.
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Selecting a Lawyer
Lawyer may work on a:
Retainer basis. One-time fee.
Types of Patents
Patent: grants holder protection from others making, using, or selling similar idea; issued by the PTO.
Utility patent: grants owner protection from anyone else making, using, and/or selling the identified invention. Design patent: provide inventor with a negative right excluding others from making, using, or selling an article having the ornamental appearance given in the drawings included in the patent. Plant patent: given for new varieties of plants, represent a limited area of interest.
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International Patents
The Patent Cooperation Treaty (PCT) was established to provide firms protection in global markets.
Has over 100 participants. Facilitates patent filings in multiple countries in one office. Administered by the World Intellectual Property Organization (WIPO) in Geneva, Switzerland. Provides a preliminary search that assesses whether filing firm will face infringements in any country.
Description of invention
Description of the drawings that accompany it. Detailed description of the invention.
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Patent Infringement
Many businesses, inventions, or innovations are results of improvements on, or modifications of, existing products. Copying and improving on a product:
May be perfectly legal A good business strategy.
Products can be licensed from the patent holder. Advisable to hire a patent attorney to ensure no possibility of patent infringement.
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Table 6.2
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Trademarks
A distinguishing word, name, or symbol used to identify a product.
Can last indefinitely. Can be filed solely on intent to use the trademark in interstate or foreign commerce. Can also be filed with intent to use in the future.
Categories:
Coined marks. Arbitrary marks. Suggestive marks. Descriptive marks.
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Table 6.2
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Copyrights
Right given to prevent others from printing, copying, or publishing any original works of authorship
Issues surrounding access to material on the Internet have led to major legal battles for the entertainment industry. Example: Napster.
Trade Secrets
Protection against others revealing or disclosing information that could be damaging to business.
Have a life as long as the idea or process remains a secret. Not covered by any federal law but is recognized under a governing body of common laws in each state.
Entrepreneur needs to take proper precautions. Legal action can be taken only after the secret has been revealed.
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Licensing (1 of 2)
Contractual agreement giving rights to others to use intellectual property in return for a royalty or fee. Type of licensing:
Patent license agreement: specifies how the licensee would have access to the patent. Trademark: involves a franchising agreement. Copyrights.
Licensing has become a revenue boom for many Fortune 500 companies.
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Licensing (2 of 2)
Question to be considered by an entrepreneur:
Will customers recognize licensed property? How well does the licensed property complement my products or services? How much experience do I have with the licensed property? What is the long-term outlook for the licensed property? What kind of protection does the licensing agreement provide? What commitment do I have in terms of payment of royalties, sales quotas, and so on? Are renewal options possible and under what terms?
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Insurance
Provides a means of managing risk in the new business.
Entrepreneurs usually have limited resources in the beginning.
Some insurances are required by law and cannot be avoided. Other insurances are not required but may be necessary to protect the financial net worth of the venture.
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Sarbanes-Oxley Act (1 of 3)
Congress passed the Act in 2002.
Has provided a mechanism for greater control over the financial activities of public companies. Has created some difficulties for start-ups and smaller companies.
Sarbanes-Oxley Act (2 of 3)
Attempt to influence the auditor or impede the internal auditing process is considered a criminal act.
Law covers bank fraud.
Sarbanes-Oxley Act (3 of 3)
Though private companies are not included, they are subject to control if:
They consult with a public company. Influence that public company in any wrongdoing established by the Sarbanes-Oxley Act.
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Contracts (1 of 2)
A legally binding agreement between two parties.
Business deals are concluded with a handshake, but in case of disagreements, entrepreneurs:
May find that there is no deal. May be liable for something never intended.
Rule is to not to rely on a handshake if deal cannot be completed within one year. Courts insist on a written contract for all transactions over $500.
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Contracts (2 of 2)
Four essential items in an agreement to provide the best legal protection:
All parties involved should be named and specific roles in the transaction specified. Transaction should be described in detail. Exact value of the transaction should be specified. Signature(s) of the person(s) involved in the deal should be obtained.
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