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1. Innovation Series - Entrepreneur
Toolkit: Business Strategies for
Intellectual Property in the Knowledge
EconomyBill Decker, PhD
Associate Director, UCSD OIC
Greg Horowitt
Director of Programs, UCSD OIC
Gary Shuster
Coleman & Horowitt, LLP
28January2016

2. What is IP?
Patents -The Concept
Copyrights -TheTangibleWork
Trademark -The Label
Trade Secrets -The Formalized Secret
Reading:Genesis of American patent and copyright law / by BruceW. Bugbee
http://roger.ucsd.edu/record=b2600938~S9
AUTM IP Basics Seminar: https://www.autm.net/AUTMMain/media/Webinars/OPDKIT3/AUTM-Basic-
Patent-101_FNL-Slides.pdf

3. Why Is It Important At Company
Start-up?
“[T]hink hard about your core value proposition and about
what makes you believe that you can win in the marketplace -
attract and win customers/buyers. Ideally your IP will have
relevance at the core to this thought. Focus your energy and
IP budget on the "secret sauce" and the rest isn't
important...as a start-up you will run out of budget before you
run out of ideas, so prioritization is key.”
Ken Denman - CEO Emotient,
https://www.linkedin.com/in/kendenman

4. What are the misconceptions or
myths about IP? (Part 1)
Confusion about value
“Patents hold little commercial value if you can't show that you can solve problems for customers.
Put another way, patents have more value the greater the relevance you can show to large
markets. Patents in and of themselves aren't the ticket to super normal returns. Solving problems
that people are willing to pay for is the path to riches. From there, protecting that value with IP
creates a secondary and sometimes substantial additional value. “
Ken Denman - CEO Emotient, https://www.linkedin.com/in/kendenman
“Patents are rarely perfect. Allowed claims might be more limited than you would ideally like. It’s
about “onion-skinning”. Relationships and supplier contracts, speed to market, regulatory
exclusivity, internal know-how can strengthen your proprietary position beyond merely what’s
claimed in your patents.”
Ted Daley – former CBO, Raptor Pharmaceuticals, UCSD EIR, https://www.linkedin.com/in/ted-
daley-9b60541
Confusion about time
“It is critical that you work closely with your IP attorney so that you understand what rights you
may lose if you disclose your technology too early.You need to consider your US and Foreign
patent strategy up front.There are numerous clocks that start based on certain actions that you
take.You can disclose your technology in the US and still be within bounds, but that same action
could jeopardize foreign filing opportunities. ”
John Beane – co-founder EcoATM, UCSD EIR, https://www.linkedin.com/in/jbeane

5. What are the misconceptions or
myths about IP? (Part 2)
Confusion about cost
“Planning a patent filing strategy with estimated costs up front, rather than reacting to costs and
events later.The cost of worldwide patent filings and maintenance can be extremely expensive,
resulting in wasted time and money when filings in certain countries are abandoned later.”
Craig Andrews - DLA Piper, Co-Chair, Emerging Growth andVenture Capital,
https://www.dlapiper.com/en/us/people/a/andrews-craig-s/
“It can easily cost $15-$20K in attorney fees to prosecute a patent application through to a grant.
Our egos entice us to patent every single idea under the sun, because they are so brilliant! If you
are a startup, you need to be judicial because you need enough money to build and scale your
product as well.”
John Beane – co-founder EcoATM, UCSD EIR, https://www.linkedin.com/in/jbeane

6. What are the misconceptions or
myths about IP? (Part 3)
Confusion about required expertise
Confusion about the substance of IP (copyright vs. patent vs. trademark)

7. Who are the experts to hire?
“Retain strategic IP counsel with clear communication skills and
congenial 'bedside manner' - the skills will have massive impact
on diligence conducted by potential partners/acquirers.”
Chrysa Mineo - former SVP, Receptos,
https://www.linkedin.com/in/chrysa-mineo-6643964

8. Strategies for IP for a start-up
(Part 1)
“Regularly have sessions with your team to brain storm possible ideas for patent
application filings. Start with core value proposition and work out to the adjacencies.
Build an expectation that you and the team will do this on a regular schedule and the
team should come to the table with pre-formed ideas and concepts to offer and
discuss.Then prioritize the product of these discussions and initiate disclosure
conversations with your IP counsel based on your ability to pay (budget). Keep the
ideas you can't afford to go after handy and secure for later sessions.”
Ken Denman - CEO Emotient, https://www.linkedin.com/in/kendenman
“In the early stages of a startup, there is a strong likelihood that your IP is still pending;
however you need to raise money.There is never a guarantee that your patents will be
granted, but it is important to make sure that someone else doesn't have aspects of
your business idea already covered - even if, and perhaps especially if those may not
even be areas you cover in your IP. Consider contracting an IP attorney for a Freedom
to Operate Opinion.This can go a long way to securing financing from Angel investors.
It will help you get in the door of aVC firm; although they will probably have their own
attorney perform the same work. ”
John Beane – co-founder EcoATM, UCSD EIR, https://www.linkedin.com/in/jbeane

9. Strategies for IP for a start-up
(Part 2)
“Be sure to have a strong Mutual Non-Disclosure Form drafted and get it signed
before showing your IP. Note that you will also need to show potential investors.They
will never sign an NDA.They see too many deals and may have already seen your idea
or one just like it. However, disclosure to an investor is a private affair ... assuming of
course that your disclosure to them is not at your trade show booth, where you are
also showing the public!”
John Beane – co-founder EcoATM, UCSD EIR, https://www.linkedin.com/in/jbeane
“Realize that patents only offer some protection, so expect infringement claims (in
either direction), and realize that larger companies can crush small companies with
infringement legal fees, whether legitimate or not.”
Tim Rueth – President/CEO of Rhevision, UCSD EIR,
https://www.linkedin.com/in/timrueth
“IP filing, prosecution and maintenance are not the places to skimp. From the earliest
days, the business and financial plan should include sufficient attention and funding to
pursue robust patent filings.”
Ted Daley – former CBO, Raptor Pharmaceuticals, UCSD EIR,
https://www.linkedin.com/in/ted-daley-9b60541

10. Strategies for Patent Focused
Companies (Part 1)
“Intellectual property is inevitably central to any investment thesis in the life
sciences industry.”
Chrysa Mineo - former SVP, Receptos, https://www.linkedin.com/in/chrysa-mineo-
6643964
“Apply a commercial mindset when formulating patent claims. Focus your
attention and resources on drafting, supporting and defending claims that will
provide tangible commercial advantage.”
Ted Daley – former CBO, Raptor Pharmaceuticals, UCSD EIR,
https://www.linkedin.com/in/ted-daley-9b60541
“* Have a proprietary and inventions agreement standard attachments to all
employment agreements.
* Establish rules and guidelines for keeping laboratory notebooks, standardize and
review with all employees.
* Establish a disclosure procedure and develop a standard Invention Disclosure
Form.“
Jack Defranco - CEOTargeson, https://www.linkedin.com/in/jack-defranco-99b2106

11. Strategies for Patent Focused
Companies (Part 2)
“It's always a good idea to cover everything in a provisional patent application.
However, there may be aspects of your IP that are less critical and you just can't
afford to prosecute.You should make sure that technology is shared in the public
domain so that no one else can patent it and block you later. ”
John Beane – co-founder EcoATM, UCSD EIR, https://www.linkedin.com/in/jbeane
“Create a minefield of patents, even those that may not be essential for your
business…these can be used as ‘trading cards’ in cross-licensing agreements.”
&
“Consider keeping some IP as trade secrets/know-how, in case disclosing through a
patent could enable competition.”
Tim Rueth – President/CEO of Rhevision, UCSD EIR,
https://www.linkedin.com/in/timrueth

12. Copyright Focused company
Software companies have to navigate the "Alice thicket“ and might not want to bother
with patents.
http://sunsteinlaw.com/wp/wp-content/uploads/2015/06/Sunstein-Patent-Strategies-
for-Getting-a-Software-Invention.pdf
Creative companies can be litigious, like Disney -
http://www.hollywoodreporter.com/thr-esq/disney-sues-edible-cake-frosting-820032
…forgiving, like Disney - http://www.dailydot.com/opinion/disney-frozen-fandom-
copyright-infringement/
…or neutral like computer games companies and the streaming of the games
http://scholarship.law.upenn.edu/penn_law_review/vol161/iss6/3/

13. Trademark focused company
"The name now characterizes a beverage to be had at almost any soda fountain. It means a
single thing coming from a single source, and well known to the community. It hardly
would be too much to say that the drink characterizes the name as much as the name the
drink. In other words Coca-Cola probably means to most persons the plaintiff's familiar
product to be had everywhere rather than a compound of particular substances. . . .We see
no reason to doubt that, as we have said, it has acquired a secondary meaning in which
perhaps the product is more emphasized than the producer but to which the producer is
entitled.'
OliverWendell Holmes, Coca-Cola Co. v. Koke, Co., 254 U.S. 143 (1920)
"The trade of advertising is now so near to perfection, that it is not easy to propose any
improvement."
Samuel Johnson, 1759

14. Scaling Your Company and Its IP
Portfolio
“Before you invest valuable years of your career in forming or building a company, do your
IP diligence.”
Chrysa Mineo - former SVP, Receptos, https://www.linkedin.com/in/chrysa-mineo-6643964
“Assigning one executive at the company the ultimate responsibility to oversee all patent
related matters. It is important that one person be responsible, and accountable.”
Craig Andrews - DLA Piper,Co-Chair, EmergingGrowth andVenture Capital,
https://www.dlapiper.com/en/us/people/a/andrews-craig-s/
"Not all the smart people work for you. By leveraging the discoveries of others, companies
can produce spectacular results."
http://hbswk.hbs.edu/item/the-benefits-of-not-invented-here

15. Strategies for IP for Non-start-ups
Sometimes public disclosure of an inventive idea is good for defensive purposes (to
serve as prior art , or "disclosure might be a strategy through which a research
firm can unilaterally extend the patent race and thereby gain advantage even in a
patent race it has no intention of abandoning."
http://qed.econ.queensu.ca/pub/faculty/ware/848/PDFs/Disclosure_paper.pdf
Avoid granting “most favored nations” provisions when licensing technology, as
they can have unforeseen and significant ripple effects on the business.
Craig Andrews - DLA Piper,Co-Chair, EmergingGrowth andVenture Capital,
https://www.dlapiper.com/en/us/people/a/andrews-craig-s/

16. Status of IP Under Bankruptcy
"Under U.S. bankruptcy laws, the trustee of a bankrupt party often has the ability to
terminate existing contracts that negatively impact the value of the assets of the
bankrupt entity. But the bankruptcy code provides special protection for patent
licensees in the event that a patent licensor files for bankruptcy. Specifically, the law
allows licensees to retain their rights under a patent license even if the patent owner
enters bankruptcy and seeks to terminate the license.This protection afforded by
U.S. law is not, however, found in the laws of many other countries."
http://www.finnegan.com/resources/articles/articlesdetail.aspx?news=fcb4f7a4-
b7d4-40e6-b4c0-8a7aebfebc0f