Intellectual Property- Represents important assets to the entrepreneur.

A category of property that includes intangible

creations of the human intellect.

Includes: Patents.Trademarks.Copyrights.Trade secrets.

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.

The Patent Application

Introduction

• Background.
• Advantages of the invention and the nature of problems that it overcomes.
• States how the invention differs from existing offerings.

Description of invention

• Description of the drawings that accompany it.

• Detailed description of the invention.

Claims

• Serve to specify what the entrepreneur is trying to patent.

• Essential parts of the invention should be described in broad terms
• Claims must not be too general either.

Application should contain a declaration or oath signed by the inventor or inventors.

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.

Checklist for Minimizing Patent Risks

• Seek a patent attorney who has expertise in your product line.

• The entrepreneur should consider a design patent to protect the product design or product look.
• Before making an external disclosure of an invention at a conference or to the media, or before setting up a beta
site, the entrepreneur should seek legal counsel since this external disclosure may negate a subsequent
patent application.
• Evaluate competitor patents to gain insight into what they may be developing.
• If you think your product infringes on the patent of another firm, seek legal counsel.
• Verify that all employment contracts with individuals who may contribute new products have clauses assigning
those inventions or new products to the venture.
• Be sure to properly mark all products granted a patent. Not having products marked could result in loss or
damages in a patent suit.
• Consider licensing your patents. This can enhance the investment in a patent by creating new market
opportunities and can increase long-term revenue.

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.

Benefits of a Registered Trademark

• Seek a patent attorney who has expertise in your product line.

• It provides notice to everyone that you have exclusive rights to the use of the mark throughout the territorial
limits of the United States.
• It entitles you to sue in federal court for trademark infringement, which can result in recovery of profits,
damages, and costs.
 • It establishes incontestable rights regarding the commercial use of the mark.
• It establishes the right to deposit registration with customs to prevent importation of goods with a similar mark.
• It entitles you to use the notice of registration.®
• It provides a basis for filing trademark application in foreign countries.

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.

• Copyrights are registered with the Library of Congress

• Usually do not require an attorney.
• Term of the copyright is the life of the author plus 70 years.

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.

Licensing- 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.

Product Safety and Liability- Responsibility of a company to meet any legal specifications regarding a new product
covered by the Consumer Product Safety Act.

Claims regarding product liability usually fall under one of the following categories:

• Negligence.
• Warranty.
• Strict liability.
• Misrepresentation.

Best protection against product liability is to:

• Produce safe products.

• Warn consumers of any potential hazards.

Insurance- Provides a means of managing risk in the new business.

Sarbanes-Oxley Act- federal law that mandates certain practices in financial record keeping and reporting for
corporations.
Contracts- A legally binding agreement between two parties.
The Marketing Plan

Industry Analysis- Provides sufficient knowledge of the environment that can affect marketing strategy decision making.

Competitor Analysis- Document current strategies of primary competitors. Information can be utilized to formulate the
market positioning strategy.

Marketing Research for the New Venture

Defining the purpose or objectives- Make a list of the information that will be needed to prepare the marketing plan.

Gathering data from secondary sources- Trade magazines, Newspaper articles, Libraries, Government agencies, Internet

Marketing plan- written statement of marketing objectives, strategies, and activities to be followed in business plan.

Characteristics of the Marketing Plan

A marketing plan should:

• Provide a strategy.
• Be based on facts/assumptions.
• Describe an organization for implementation.
• Provide for short-term and long-term continuity.
• Be simple and short.
• Be flexible.
• Specify criteria for control.

Factors Affecting the Marketing System

Marketing system: interacting internal and external factors that affect venture’s ability to provide goods and services to
meet customer needs.

Internal variables that affect the marketing plan:

• Financial resources
• Management team
• Suppliers
• Company mission

The Marketing Mix- Combination of product, price, promotion, and distribution and other marketing activities needed to
meet marketing objectives.

Marketing Mix Critical Decisions

Variable
Quality of components or materials, style, features, options, brand name, packaging,
Product sizes, service availability, and warranties.

Quality image, list price, quantity, discounts, allowances for quick payment, credit
Price terms, and payment period.

Use of wholesalers and/or retailers, type of wholesalers or retailers, how many,

Channels of length of channel, geographic coverage, inventory, and transportation.
distribution

Media alternatives, message, media budget, role of personal selling, sales promotion
Promotion (displays, coupons, etc.), and media interest in publicity.

Steps in Preparing the Marketing Plan

• Define the business situation.

• Define the target market: opportunities and threats.
• Consider strengths and weaknesses.
• Establish goals and objectives.
• Define marketing strategy and action programs.

Defining the Business Situation

Situation analysis: describes past and present business achievements of new venture.
Defining the Target Market

Target market: specific group of potential customers toward which venture aims its marketing plan.

Market segmentation: process of dividing a market into definable and measurable groups for purposes of targeting
marketing strategy.

Marketing Strategy: Consumer versus Business-to-Business Markets

Business-to-business markets

• Selling of products or services to another business.

• Usually aims at selling a large volume in one transaction.
• Involves a more direct channel of distribution
• Use trade magazine advertising, direct sales, and trade shows.

Consumer markets

• Involve sales to households for personal consumption.

Marketing mix for both is the same.

• Techniques and strategies within the mix of these factors vary significantly.

Budgeting

• Costs are reasonably clear if the entrepreneur has followed the procedure of detailing the strategy and action
programs.
• If assumptions are necessary, they should be clearly stated.
• Useful in preparing the financial plan.

Implementation

• The plan is meant to be a commitment by the entrepreneur to a specific strategy.

• Entrepreneur should ensure coordination and implementation of the plan.

Monitoring the Progress of Marketing Actions- Involves tracking specific results of the marketing effort. Depends on
specific goals and objectives outlined in the marketing plan.