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Entrepreneurship Chapter 6 Intellectual Property Other Legal Issues For Entrepreneursd
Entrepreneurship Chapter 6 Intellectual Property Other Legal Issues For Entrepreneursd
Chapter 6
Intellectual Property & Other Legal Issues for Entrepreneurs
Intellectual Property is any patent, trademarks, copyrights, or trade secrets held by the
entrepreneur.
These represent important assets to the entrepreneur and should be understood.
Ignoring these important steps may cause a loss of these assets.
Patents
1. Grants holder protection from others making, using, or selling similar ideas.
2. It is a contract between the government and inventor for exclusively using the
invention over a period of time.
3. Utility Patents.
Term of 20 years beginning on the date of filing with the patent office.
Inventions requiring FDA approval extend the term of the patent to
include the time it takes the FDA to review the patent.
$790.00 filing fee.
Additional fees may occur depending upon the amount of claims.
Grants protection from anyone else making, using or selling the invention.
Generally reflects protection of new, useful and unobvious processes that
may enhance the product.
4. Design Patents.
Covering the appearance of an object.
14year term.
$200.00 filing fee.
Renewed interest in these patents because Nike & Reebok protecting their
ornamental designs.
Molded plastic and container configuration businesses find these important.
5. Plant Patents.
Issued under the same provisions as utility patents and are for varieties of new
plants.
Limited area of interest and very few are issued.
6. International Patents
World Trade Organization (WTO) global free trade has been encouraged, thus
needing protection internationally for patents.
Patent Cooperation Treaty (PCT) has over 100 countries participating.
Administered by the World Intellectual Property Organization (WIPO) in
Switzerland will search whether the filing firm will face any possible
infringements in any country.
Patent Infringement
The entrepreneur should be sensitive whether he/she is infringing on another’s
patent.
This is not the end of the idea because many businesses have been started by the
results of improvements and modifications.
Improving a product is not necessarily patent infringement.
Page 176, Table 6.1.
Trademarks
A distinguishing word, name or symbol used to identify a product.
The trademark can last indefinitely as long as the mark continues to perform its
indicated function.
Starting November 16, 1989, a trademark is given a ten year initial registration
with ten year renewable terms.
In the fifth to sixth year you must file an affidavit indicating the mark is currently
in commercial use.
Four categories;
1. Coined marks denote no relationship between the mark and the goods or
services and afford the possibility of expansion to a wide range of
products. (Ex. Mercedes, Kodak)
2. An arbitrary mark has another meaning in our language and is applied to a
product. (Ex Apple)
3. A suggestive mark is used to suggest certain features or qualities of a
product. ( Ex. Halo shampoo)
4. A descriptive mark must have become distinctive over a significant period
of time and gained consumer recognition before it can be registered. The
mark then is considered to have a secondary meaning, (Ex Rubberoid is
applied to roofing materials containing rubber.)
Copyrights
The right given to prevent others from printing, copying, or publishing and
original works of authorship.
It does not protect the idea so the concept can be used by others.
With the Internet, music and software downloads are major issues today.
In 2005 the Supreme Court ruled that file sharing for music was a copyright
violation.
Copyrights are filed with the Library of Congress and do not require an attorney.
Copyrights are also important to sculptures, maps, blueprints, board games, etc.
Trade Secrets
Protection against others revealing or disclosing information that could be
damaging to a business.
Trade secrets are not covered under federal laws but by common law in each
state.
Employees working with a new idea might be asked to sign a confidential
information agreement preventing them from passing the information outside the
group while working for the firm and after leaving. (Page 182, Table 6.3)
Sometimes it is difficult to share with employees but we now know that they will
be more creative and effective if they share in the big picture.
To protect from competitive information leaving the firm, use the following ideas;
1. Train employees to refer sensitive questions to one person.
2. Provide escorts for all office visits.
3. Avoid discussing business in public places.
4. Keep important travel plans secret.
5. Use simple security such as locked file cabinets, passwords on computers
and shredders.
6. Have employees and consultants sign nondisclosure agreements.
7. Debrief departing employees on confidential information.
8. Avoid faxing sensitive information.
9. Mark documents confidential when needed.
Licensing
Contractual agreement giving rights to others to use intellectual property in return
for a royalty or fee.
Licensing has significant value as a marketing strategy.
A patent license agreement specifies how the licensee would have access to the
patent.
Licensing a trademark usually requires a franchise agreement.
Copyrights can be licensed.
Contracts
A legally binding agreement between two parties.
Page 189, Table 6.5
HOMEWORK
Answer the following questions;
1) Provide a real life example (you, or a friend or family member) for each of
the following different types of product liability:
a) Negligence.
b) Warranty.
c) Strict Liability.
d) Misrepresentation.