Contents. 1 Introduction... 1

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1 Contents 1 Introduction... 1 Part I Startup Funding Sources, Stages of the Life Cycle of a Business, and the Corresponding Intellectual Property Strategies for Each Stage 2 Sources of Company Funding Seed Capital and Early-Stage Funding Personal Investment/Bootstrapping Friends and Family Funding Private or Governmental Grant Funding Options Crowdfunding Equity Funding Angel Investors Venture Capital Rounds of Venture Capital Financing Series A, Series B, Series C, etc Business Incubators and Accelerators as a Source of Equity Financing Debt Funding Loans Lines of Credit Securitization with Intellectual Property Collateralization of IP Mezzanine Financing Subordinate Notes Preferred Stock Anticipated Rate of Return for Investors Early-Stage Strategy IP Strategies at the Early Stage Consult with an Intellectual Property Attorney ix

2 x Contents 3.3 Begin Building an IP Portfolio and an IP Strategy Trademarks Copyrights Opting for the Trade Secret Route Patents Early-Stage Companies Seeking Investors Need a Business Plan Integrating an Intellectual Property Strategy into a Business Plan IP Due Diligence IP Portfolio Development Plan Joining a Business Incubator or Accelerator Case Study: Techstars Industry-Specific Startup Service Providers and Specialty Incubators Summary Growth and Expansion Stage Benefits of Leveraging IP During the Growth and Expansion Stage Leveraging IP: Strategies for Obtaining Debt or Equity Funding IP Strategies at the Growth and Expansion Stage Enhancing Your IP Portfolio Filing a Non-provisional Patent Application Enhancing Your Portfolio with Trademarks Enhancing Your Portfolio with Copyrights Other Intangible Assets that Can Have Value for a Company Utilizing Trade Secret Protection Using IP Rights as Leverage in Business Partnership Funding/Strategic Investments Licensing Intellectual Property What Is An Intellectual Property License? Factors to Consider in an IP License License Restrictions Consideration Maintenance of IP Rights Other Terms Cross-Licensing Focus on Marketing, Partnerships, and IP Marketing the Company Summary... 68

3 Contents xi 5 Mature, Exit, and Rebirth Stages Reaching the Mature Stage with Your Company Consider Expanding Patent Protection Expedited Patent Examination Options Continuation and Divisional Patent Applications International Patent Filings Consider Making Strategic Partnerships Exit Strategies Being Bought Out Divestiture of IP Rebirth of a Company Spinning off IP into a New Company Cross-Industry Applications: Channel Programs Summary Achieving Success Stage Defining Success Signing a Major Customer Initial Public Offering Acquisition of a Competitor Suggested Timeline Part II Overview of Intellectual Property Rights for Startups 7 Trademarks and Trade Dress Trademarking a Startup s Company Name, Logo, and Domain Name What Is a Trademark? Choosing and Developing a Brand for Your Startup Non-protectable Subject Matter Selecting a Trademark Brainstorming Phase Narrowing Phase Knockout Phase Clearance Search Obtaining a Legal Opinion Protecting a Trademark Common Law of Trademark Federal Trademark Protection State Registration International Protection Maintaining Trademark Rights Maintaining Federal Registration Licensing Trademarks Assignment of Trademarks Policing Trademark Use

4 xii Contents 8 Domain Names Securing Intellectual Property in Domain Names Domain Name Disputes Case Study: Domain Dispute Between Startup Codecademy and Code Academy New Top-Level Domains New Top-Level Domains and Startups Patents Patent Protection as an Intellectual Property Strategy for Startups Patentability Requirements in the USA Patentable Subject Matter Invention Has Utility Invention Is Novel Invention Is Non-obvious Types of Patents Provisional Applications Non-provisional Applications The Anatomy of a Patent Application Assignment of Patent Rights Inventorship Versus Ownership What to Expect: The Patent Application Examination Process Continuing Applications Going Global: International Patent Considerations Patent Protection for Software Trade Secrets Secrecy Creates Value: How Startups Utilize Trade Secret Protection What Laws Protect Trade Secrets? The Uniform Trade Secrets Act The Defend Trade Secrets Act Independent Discovery and Reverse Engineering of Trade Secrets Theft of Trade Secrets: Misappropriation Corporate Espionage Employee Poaching Cybertheft Copyrights Copyrightable Subject Matter Scope of Protection Software and Apps as Copyrightable Matter Advertising, Marketing Materials, and Product Packaging

5 Contents xiii Training Manuals, User Manuals, and the Like Secret and Other Materials Including Software Ownership and Authorship Works for Hire Jointly Authored Works Licensing and Assignment of Copyrights Derivative Works Fair Use Registration Issues Intellectual Property Issues in Labeling and Marketing Government Controls Over Advertisements and Labeling Federal Trade Commission State Regulation Government Controls Abroad Patent Marking Non-government Controls Comparative Advertising Enforcement and Infringement of Intellectual Property Rights Policing Your IP Rights Evaluating a Controversy Before Commencing Litigation Remedies Injunctions Payment of Royalties Monetary Damages Settling Controversy Without Litigation Arbitration Mediation Licensing Agreements IP Litigation Selecting a Jurisdiction Causes of Action Preliminary Injunction Discovery Stage Summary Judgment Trial Costs Proceedings in the United States Patent and Trademark Office Trademark Oppositions Patent Post-grant Review Proceedings

6 xiv Contents Part III Implementation of IP Strategies for Startups 14 Successful Implementation of a Startup s IP Strategy Talk with an Intellectual Property Lawyer Confidential Disclosure or Non-disclosure Agreements Assignment of Rights Employee Education Accurate Record Keeping Patents Trade Secrets Patent and Trademark Searches Patent Searches Trademark Searches Choosing the Best IP Protection for Your Startup Deciding Between Patent or Trade Secret Protection Developing and Managing an Intellectual Property Portfolio Developing an Intellectual Property Portfolio Strategy that Fits the Startup s Business Goals Identifying Startup Business Objectives and Goals and aligning these with the Startup s IP Strategy Identification of IP Assets Periodic Review of IP Assets Administrative Issues for Long-Term IP Portfolio Management Ongoing IP Diligence: Protecting Rights and Pursuing Others Defending Your IP Leveraging Your IP Rights Valuing Startup Companies Purpose of a Valuation Methodologies Cost or Asset-Based Approach Income Approach Market Approach Normalization of Earnings and Cash Flows Impact of Risk on Value and Cost of Capital The Uniqueness of Early-Stage Technology Company Valuations Allocation of Enterprise Value to Senior and Junior Equity Interests The Current Value Method The Option Pricing Method The Probability-Weighted Expected Return Method

7 Contents xv 16.7 Leverage and Monetization of IP Value of IP and Impact on Technology Companies IP and the Enforcement of Rights IP Monetization Licensing of Intellectual Property Rights for Startups What Is an Intellectual Property License? Factors to Consider in an IP License Identification of Rights to Be Licensed Restrictions Considerations Maintenance of IP Rights Other Terms Cross-Licensing Intellectual Property Licensing Standard-Essential Patents Licensing Code and Software When a Startup Needs Software When Startup Sells or Develops Software Startup Tips for Avoiding and Preventing Intellectual Property Problems Get Legal Advice Early Conduct Cost-Benefit Analysis on IP Protections Do Things Correctly at the Outset Protecting the IP You Have Evaluate What IP Procurement Offers the Most Value Take IP Protection, Policing, and Enforcement Seriously IP Is Important, so Is Running Your Startup Do not Infringe Others IP Rights Prevent Contamination of IP Rights Appendix A Appendix B Appendix C Appendix D Index

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