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Patent Strategies For Small High-Technology Companies. By David M. O’Dell ODellD@haynesboone.com 214.651.5262. Are you changing?. Intellectual Property Law. 1. Why IP is Important 2. What is a Patent? 3. Patent Strategies 4. Stories and Examples.
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Patent Strategies For SmallHigh-Technology Companies By David M. O’Dell ODellD@haynesboone.com 214.651.5262 Are youchanging?
Intellectual Property Law 1. Why IP is Important 2. What is a Patent? 3. Patent Strategies 4. Stories and Examples
Intellectual Property Core Corporate Assets "In 1982... hard assets accounted for 62% of [a] company's market value; ten years later they made up only 38%. And these were the industrial's." Fortune, October 2, 1995
Uses of Patents • Create Barrier To Stop Competitor • Priceline.com’s suit against Expedia • Generate Licensing Income • Priceline.com’s $1.5MM License to Alliance Mortgage • Defensive Cross-Licensing
Intellectual Property Law 1. Why IP is Important 2. What is a Patent? 3. Patent Strategies 4. Stories and Examples
What is a Patent? • Right to Exclude Others • A Bargain Struck with Government • Claims Define the Right - “Metes and Bounds” • Competitors Have Right to Design Around • Last for about 17 years
Invention Must Be New and Non-Obvious • Not Patentable if Differences Between Prior Art and Invention Are “Obvious” • Easy to Show Non-Obviousness • “Person of Ordinary Skill” Standard • “Manner of Making” Not a Negative • “Commercial Success” Supports Non-Obviousness
Level of Obviousness Today
Examples of Patentable Subject Matter • Software • Signalling Methods • Business Methods (Telecom Services) • You Cannot Patent • Laws of Nature or • Abstract Ideas
Software Patents Issuedby PTO Patents Issued
Signalling Methods System for Controlling Usage of Phone Debit Cards
Intellectual Property Law 1. Why IP is important 2. What is a Patent? 3. Patent Strategies 4. Stories and Examples
Need For IP Strategy ”If small entrepreneurs want to protect themselves, they better get into the game.” Q. Todd Dickinson Acting Commissioner of Patents
Reasons for Building a Patent Portfolio • Attract Venture Capital • Preserve Market Exclusivity • Generate Revenue • Defense Against Competitors • Increase Market Capitalization • Generate Publicity
Right-to-Use and Clearance Searches • Check for any patents that will prevent you from entering the market place • Identify patent strategies of competitors • Identify design-around requirements
Intellectual Property Law 1. Why IP is important 2. What is a Patent? 3. Patent STrategies 4. Stories and Examples
Patent Patent The Computer Wars Compaq Dell Austin Computers
The Computer Wars Compaq Dell Austin Computers
Lessons Learned • The strategy of “we can do the same thing, only cheaper” does not usually work in a competitive environment • Building a strong patent portfolio of your own enables cross-licensing • Strategic partners also enable you to cross-license
Patent Centillion Data Systems Sprint AT&T Centillion
Centillion Data Systems Sprint AT&T Centillion
Lessons Learned • Developing a niche idea or an adjunct-type system can often be successful • Acceptance and licensing by industry leaders (or by the general public) also serve to further validate your patent
Patent Stacker & Windows Disk Doubler Stac Microsoft
Stacker 4.0 & Windows Disk Doubler Stacker Microsoft
Lessons Learned • Patents protect from encroachment • Limiting your business to your invention protects against cross-claims
Patent Patent Patent Patent Patent Ball Semiconductor
Lessons Learned • If you are entering a new, pioneering technology, a broad-reaching patent strategy adds value to your company • Modern example, nano technologies
Tivo, Replay, & Amazon.com Each of these companies announced an issued patent and saw there stock take an immediate jump.
Lessons Learned • Patents are valuable to investors
Conclusion • Big players typically have a strong patent portfolio • Licensing and joint-venture can provide some level of patent protection • Start patent process soon • Even if Company fails, patents can still be a source of revenue
Patent Strategies For SmallHigh-Technology Companies By David M. O’Dell ODellD@haynesboone.com 214.651.5262 Are youchanging?