I2V: Intellectual Property -- How to Keep Your Ideas Yours

Issues in Intellectual Property
Jeffrey A. Proehl
Woods Fuller Shultz & Smith, PC
Sioux Falls, SD

Important documents for the early stages of your business:

1. Non-disclosure agreement: protects your competitive advantage
2. Non-competition agreement: keeps employees from taking your knowledge elsewhere
3. Non-solicitation agreement: keeps employees from using contacts they built with your company to build their own ventures
4. Intellectual property assignment agreement: establishes that anything your employee creates on company time, with company resources, belongs to you
5. Emloyment agreements (generally include all of the above)

Intellectual Property can include inventions, literary and artistic works and symbols, names, images, and designs used in commerce. It is a major asset of any tech-based venture. The four major types:

1. Patent: "the right to exclude others from making, using, offering for sale, or selling" your invention or importing your invention into the US. The US government issues patents here, but it's up to you to enforce the patent by suing the violator in court. Note that the US grants patents to the person who can show he invented the thing first. In most of the rest of the world, the patent goes to the first person to file.
   
2. Copyright: protects certain works that are original, sufficiently creative, and "fixed in a tangible medium of expression." Copyright protects the expression of ideas, not the ideas themselves. It lasts seven years past the death of the author. You can register copyright (and you have to if you're going to sue anyone), but it exists from the moment of creation.
   
3. Trademark: protects names, symbols, devices "used to identify the goods of one seller from goods manufactured or sold by others, and to indicate the source of the goods" (also applies to services). The Microsoft Windows opening sound and the Owens-Corning pink in the insualtion are trademarks.
   
4. Trade Secret: used for something that can't be reverse-engineered. Really hard to enforce and control. Once someone spills the beans, well, you can sue all you want, but your trade secret is out there, and your advantage is gone.

Licensing allows you to retain some ownership and make some money while allowing others to bring your idea/technology to market. A licensing agreement, like any contract, needs to spell everything out very clearly so no one gets hosed!

Patents get tricky with academic research. The US gives you one year to apply for a patent following public disclosure (e.g., submission for publication). If you are in the university and think you have a marketable idea, you really need to think ahead before submitting for publication or making a conference presentation. Average cost of patent application $5,000 for a simple mechanical invention up to $20,000 for more complicated artifacts. Uh oh -- the cost of graduate school just doubled, as we have to consult with our patent lawyers at various turns in our research.

Fenicle says his office at Creighton does provisional apps in a couple of hours. Provisional apps cost $3,000 to $5,000. Nice to have the service, but it does seem to complicate the process of academic research. Students and faculty just need to decide how important the business side of their research is. If you just love the library and laboratory, enjoy. If you do have an eye on business applications, doing your homework is going to take longer.

A good point for DSU students: Protecting programming code can be done under copyright -- that says people can't burn spare disks and distribute. But patent protection goes further and protects the actual concepts and functions in the code.

Nelsen says the intellectual property protection will drive you nuts! It takes time, requires patience, absolutely mitigates risk-taking and go-getter-ship. But you've got to do it... or, better yet, you've got to get a lawyer whom you can trust and talk to who will handle all that stuff for you.