Intellectual Property Overview

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Intellectual property (“IP”) can be one of the most valuable assets to a startup

company, whether it is a patent on a new innovative technology, the customer

goodwill associated with your trademark and brand, or a copyright over your

original material. This IP portion of the startup kit provides a few tools to

help you as an entrepreneur when you develop and seek protection for your

IP and maintain this protection over time.

1 10 Dos and Don’ts of Intellectual Property for Start-Ups

We start off by providing a list of 10 common mistakes about a company’s

intellectual property that business owners make that you should be aware of

and avoid as you manage your startup’s intellectual property.

Understanding this best-practices checklist will help you avoid these

mistakes. For your deeper understanding of these common errors and what

you should consider doing instead, we have included detailed explanations

for each of them.

2 Intellectual Property Primer

The Intellectual Property Primer serves as an introductory overview of the

different types of IP: trademarks, patents, copyright, and trade secrets. The

primer is not an exhaustive summary of all the legal issues that might arise in

each area of IP law; rather, it provides a quick outline of the key points that

might be relevant to your startup as you learn which measures will protect

your company’s IP.

For each category of IP, the primer will discuss what types of subject matter

are eligible for protection, the criteria for obtaining protection for your IP, the

scope of your rights as an owner of these rights, and how to secure and

maintain these rights.

This primer will help you start thinking about how to protect your startup’s

intellectual property rights. However, we strongly encourage you to consult

an attorney when dealing with these complex issues. If you are filing a patent

application, you should have an attorney help you search for prior art and

draft and compile the application.

For complex trademark issues, you may want to consult an attorney as you

search competitors and existing marks to ensure clearance for your use of the

desired trademark. If you face a copyright infringement action, you should

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consult an attorney to navigate copyright law’s fuzzy areas where the courts

do not follow bright-line rules.

3 Annotated Non-Disclosure Agreement

A non-disclosure agreement (“NDA”) is a contract between an employer and

an employee that protects confidentiality and ensures that commercially-

valuable information is handled appropriately. This standard NDA provides a

basic framework for the provisions that this agreement should include, such

as confidentiality, compliance with security policies, and long-term

protection of the employer’s intellectual property assets.

A best practice is to have the employee sign an NDA before commencing

employment; however, the NDA can be adapted for a currently employed

individual.

It is important that you seek advice from an attorney to ensure that your NDA

will be enforceable. An attorney will tailor the agreement to reflect the laws

of the state that will govern it. Additionally, you should consult an attorney to

discuss the various issues that arise through this agreement including:

 whether there is adequate consideration for the agreement to be

effective;

 tailoring the definitions of confidential and proprietary information;

 drafting the assignment and work made for hire provisions; and

 ensuring that the agreement is adapted for an at-will or for-cause

employment scenario.

Disclaimer

These documents were created and vetted by students and supervising

attorneys at the University of Pennsylvania Law School’s Entrepreneurship

Legal Clinic applying Pennsylvania law. They are intended to educate and

inform the early stage start-up. As such, they are designed to be simple and

accessible and may omit terms or language relevant to your specific

circumstances. Please carefully read through the documents and any

instructions and annotations included therein.

You acknowledge that your use of these documents does not create an

attorney-client relationship between you and the Clinic or you and the

individual members of the Clinic and does not constitute the provision of

legal advice or other professional advice. You should seek advice from a

licensed attorney before using or relying on these documents. Additionally,

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none of the documents created constitute tax advice. By using and relying on

these documents, you assume all risk and liability that may result.

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10 Dos and Don’ts of Intellectual Property for Start-ups

Engaging Others

Don’t: Engage people (outsiders or employees) to help create or develop the

IP without first assigning the necessary agreements.

Do: Understand who owns the IP.

 Review startup members’ employment contracts with former

employers.

Do: For all collaborators, define and document ownership using:

 non-disclosure agreements; and

 IP assignment agreements.

Launching Your Brand

Don’t: Launch your business around a brand, trademark, or invention that

cannot be protected.

Do: Trademarks:

 Consult a trademark lawyer and research competitors (beyond

a PTO online search) before investing heavily in a brand.

 Select a strong trademark that is distinctive (fanciful or

arbitrary), not descriptive.

Patents:

 Search and review prior art as early as possible to understand

the patent landscape in order to answer 2 questions:

1. Do you have the freedom to operate?

2. What can you protect through your own patent filings?

Choosing Your Trademark

Don’t: Choose the wrong trademark class or too many trademark classes.

Do: Accurately describe the products or services that your trademark will

apply to.

Do: Think about future product expansion to include a broader scope, but

avoid false or misleading information.

Protecting Your Trademark

Don’t: Fail to protect and enforce your trademark.

Do: You must enforce your trademark rights in order to protect your mark.

Pay attention to make sure no one is infringing on your mark and take

steps to stop infringing parties.

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Public Disclosures

Don’t: Publicly disclose your technology before filing a patent (e.g., through

printed publication, disclosures, availability for public sale, etc.).

Do: Avoid disclosure—but if you do disclose, file a patent within one year

of public disclosure.

Timing

Don’t: Wait too long to file patent applications as an attempt to save

money.

Do: File early and file often. File a provisional patent application early to

establish an earlier effective filing date.

Drafting Strategies

Don’t: Rush to file a weak, poorly drafted initial patent application that

offers little protection for your innovation.

Do: Invest seriously in the startup’s first one or two patent applications

and file a carefully drafted, high-quality patent application.

Do: Avoid overreaching and speculative language. Ideas are not

patentable.

Do: Avoid language that is too narrow.

Do: Understand the IP landscape and corner a valuable part of the market.

Ask:

 What is the company doing now?

 Where is the company headed?

 What are the business goals?

 Who are the actual and likely competitors?

Do: Think about a global strategy.

Unlicensed Images

Don’t: Do a quick Google image search and use unlicensed images on your

website or blog.

Do: Use only licensed images, unless you have express permission from

the author.

Do: Subscribe to a stock photography service such as Shutterstock or

iStock.

Do: Use creative commons licensed images.

Fair Use

Don’t: Use pieces from copyrighted works if you don’t understand “fair

use” in copyright law.

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Do: Be careful about using copyrighted material, no matter how little, if

you do not have the owner’s permission.

Do: If you plan on using copyrighted material under the fair use doctrine,

be sure you fully understand the four factors and how courts may

perceive this use.

Maintaining Your Trademark

Don’t: Fail to maintain and renew your trademark registration.

Do: File the appropriate registration renewal documents with the USPTO

between the 5th and 6th years and between the 9th and 10th years

after your initial registration of the mark, and then every 10 years

thereafter.

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Intellectual Property Primer

1 Engaging people (outsiders or employees) to help create or develop

the IP without first assigning the necessary agreements

Be aware of ownership issues when it comes to developing your company’s

IP. There are three common reasons that a startup might not own all of its IP:

 There was no formal assignment agreement prior to the property’s

invention and the inventor now refuses to assign his IP rights to the

startup. In the early stages, many startups will start developing their

IP without a formal agreement between inventors, founders, and other

collaborators. Someone contributing to the IP might be considered an

inventor and have rights in the IP, and without any assignment

agreement, this inventor would be able to assign the rights or license

the invention to another party without the startup’s permission.

 The startup did not have a formal agreement with independent

contractors or other companies hired by the startup to help develop

the IP that assigns the IP rights to the startup.

 The inventor might have existing obligations to a former employer to

assign all rights to any inventions invented by the employee to that

company for a period of time.

2 Launching your business around a brand name, trademark, or

invention that cannot be protected

Rushing ahead can lead to inefficient spending and patents or trademarks

that do not offer much protection. It is imperative to research competitors

with similar prior inventions, trademarks, patents, and copyrights to

understand what you can protect. Researching the prior art is also important

to avoid claims against you for willful infringement. You might be stuck with

large punitive damages if you failed to conduct a thorough investigation of

prior inventions or trademarks and it turns out you are guilty of

infringement.

For trademarks: thoroughly research competitors before investing time and

money in your brand. While a search on the PTO database is a good starting

point, this search alone is not sufficient or reliable for determining whether

marks are cleared for use or registration. Trademarks do not need to be

registered to be protected, so looking only at trademarks that have been

registered with the USPTO does not provide a full picture of which

trademarks are being used in commerce.

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Furthermore, a PTO search will find only identical trademarks—not those

that are confusingly similar—and your trademark must not be confusingly

similar with any existing trademarks. It is important for new startups to look

at other sources, such as state trademark registries, publications specific to

the industry, and the web. It is also wise to consult a trademark lawyer who is

adept at conducting strategic searches.

Select a trademark that is distinctive and strong, not just descriptive.

Trademarks that are arbitrary or fanciful receive the strongest protection,

while descriptive trademarks must acquire secondary meaning to be

protected. You do not want to register and invest in the branding of a

trademark only to have a court declare years later that your mark is invalid.

You may also end up paying a significant amount in damages for using an

infringing trademark.

For patents: conduct a basic but thorough search of prior art in your

startup’s industry as early as possible. You must be able to answer the

following 2 questions:

 Do you have the freedom to operate?

 What can you protect through your own patent filings?

It is important to do the research early and know the answers before filing

for a patent. You might be asked these questions when looking for funding,

trying to go public, or trying to get acquired. Furthermore, you do not want to

waste time and money constructing a patent application that will get denied

by the USPTO because all the claims are precluded by prior art.

3 Choosing the wrong trademark class or too many trademark classes

When registering your trademark, protection will apply only to the products

and services you have listed on your trademark application form (“trademark

classes”). The USPTO defines very specific trademark classes, and you must

be careful that you are accurately describing the products or services that

your trademark will apply to. On the flip side, it is also illegal to list every

product or service on the application.

Your trademark must be attached to every product or service listed on the

application. A trademark must also be in use in commerce to gain trademark

rights, so you will own only the trademark rights in relation to the particular

goods or services for which the mark is actually being used and the natural

zone of expansion. For example, if you own a trademark for bicycles, you

probably will not be able to prohibit someone else from using the same mark

for a completely different product, such as curtains.

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4 Failing to protect and enforce your trademark

There are a few ways that you might lose rights to your trademark. The

following are pertinent to startup companies:

 Not using your trademark. You must be actively using your

trademark in commerce (to identify your goods or services) to

warrant protection and stop others from using a similar mark. You

may also reserve a trademark for future use by filing an intent-to-use

trademark registration application, but this mark will not be

registered until you actually start to use the mark in commerce.

 Abandonment. Even if your mark is registered, you may lose rights to

your trademark if you stop using the mark with no intent to use it

again. Furthermore, if you stop using your trademark for three

consecutive years, this creates a rebuttable presumption of

abandonment of the mark.

 Failure to police and enforce your mark. You might lose your

trademark rights if you do nothing to stop other parties from using

marks that are confusingly similar to your mark. Even if your

trademark is registered, the presence of similar marks in the market

can cause your mark to lose distinctiveness, to become weaker as a

source identifier, and to lose its value. Policing the trademark is not

the USPTO’s responsibility but the owner’s responsibility. You must

still be vigilant to prevent other parties from using your mark on their

goods or services. This can involve steps like sending a cease-and-

desist letter to an infringing party and filing a lawsuit against the

infringing party if necessary. Lawsuits can accomplish two things:

1) stopping the infringing party from using a mark that you

believe is infringing on your trademark; and

2) winning and collecting damages for any loss of business

opportunity due to the infringing party’s use of your mark.

5 Public disclosure of your technology before patent filing (e.g.,

printed publication, disclosures, availability for public sale)

It is important to avoid public disclosure of your ideas because you might

lose the ability to patent this invention. If your ideas are publicly disclosed

before you file a patent application:

 You must file a patent application within one year of disclosure or you

lose patent rights in the U.S.

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 You immediately lose almost all patent rights outside the U.S. because

most countries have no grace period.

6 Waiting too long to file patent applications as an attempt to save

money

The United States follows the first-to-file rule. If you wait too long to file a

patent application, you might lose the race completely. Even if you invented it

first or worked hard to develop a similar product independently, but

someone else filed for a patent first, you will not be able to obtain patent

rights and will be prevented from doing business related to this invention.

Instead, you should invest a reasonable amount of your budget to develop

and patent major innovations. File a provisional patent application to

establish an earlier effective filing date, which will stay in effect for 12

months from the filing date. Doing so protects the date and delays attorney

costs temporarily until filing the nonprovisional patent applications.

Unlike a patent application, a provisional patent application does not have to

include a formal patent claim, an oath, or a declaration. Provisional

applications also should not include any information disclosure (prior art)

statement, since the USPTO does not examine provisional applications. It

simply is used to establish an earlier effective filing for a subsequent

nonprovisional patent application.

The provisional application will last for 12 months from the filing date and

cannot be extended. During this 12-month period, the applicant must file the

corresponding nonprovisional patent application claiming the benefit of the

provisional application or convert the provisional application into a

nonprovisional application.

7 Rushing to file a weak, poorly drafted initial patent application that

offers little protection for your innovation

While it is important to file early because of the first-to-file rule, it is also

important not to rush and prematurely file several patent applications that

have little value. If the patent application is too narrow, it will provide little

protection against competitors with competing similar products. However, if

the application is too broad, it may not sufficiently support its claims.

Furthermore, potential investors will want to know that the startup has

strong protection over its key products.

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8 Doing a quick Google image search and using unlicensed images on

your website or blog

When you are looking for images to add to your website or blog, it may seem

harmless to do a simple Google image search. However, using unlicensed

images that you did not pay for or get permission to use can result in negative

consequences. Most images found online are protected by copyright. It might

seem like a small risk to use one of these images on your website, but since

2006, stock image companies have been aggressively going after infringing

parties. Few lawsuits are filed, but these companies send letters to infringers

demanding up to $1,000 per image in damages.

Instead, use only licensed images or make sure you pay for or get permission

from the copyright owner of the image. A good source for licensed images is

Creative Commons on Flickr, where users can offer their photos and other

images under a Creative Commons license. However, users can choose to

allow or restrict certain rights to the image, so be sure to read the fine print

for each image you use. For an interesting article on this litigation campaign

against copyright infringement, see The Stock Photo Industry’s Massive

9 Using pieces from copyrighted works without understanding “fair

use”

It is always best to get the copyright owner’s permission before using any

amount of copyright-protected work, but the doctrine of “fair use” under the

doctrine of “fair use” limits the rights granted to copyright owners, allowing

other parties to use the copyrighted material in limited circumstances that

would be considered “fair use.”

The Copyright Act identifies certain types of uses as fair use, including

criticism, commentary, news reporting, teaching, scholarship, and research.

Still, the rules are fuzzy and courts often come to conflicting decisions on the

issue. Courts weigh the following four factors to determine whether the use

of copyright material is fair use:

 Purpose and character of the use;

 Nature of the copyrighted work;

 Amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

 Effect of the use upon the potential market for or value of the

copyrighted work.

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Determining whether your use of copyrighted material falls under fair use

can be difficult, and it may be wise to consult an attorney before relying on a

fair use defense to an infringement suit. For an explanation of these four

factors, see U.S. Copyright Office Information on Fair Use.

Further, business owners may assume that if they only use little pieces from

other works, the amount copied is too small for courts to even conduct a fair

use analysis. Like the fair use defense, there are no bright line rules for

determining whether the use was de minimis, so be sure you understand the

doctrine or consult an attorney.

10 Failing to maintain and renew your trademark registration

For a trademark registration to remain valid over time, the owner must file

particular forms to renew this registration according to a very specific

timeline. Click here

for more information on the timing of filing the renewal

forms and for links to these forms for renewing your trademark registration.

Intellectual Property Overview

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Source: Professor Polk Wagner, University of Pennsylvania Law School

Trademarks

Trade Secrets

Patent

Subject Matter



Source designation

identifiers: logos,

words, names,

slogans, trade dress



Literary works,

musical works,

dramatic works,

drawings,

business

plans/charts,

paintings,

sculpture, fashion,

graphic designs,

architecture



Generally,

anything that

can be kept

secret

(usually

means

formulas,

methods,

processes)



Utility Patents:

processes, machines,

manufactured goods,

methods, chemical,

biological and

compositions of matter

 Plant patents: plants

 Design patents: designs

Source of Law



Federal: Lanham

Act

 State: Common law



Federal: Copyright

Act



State law



Federal: Patent Act

Standard for

Protection



Distinctiveness

 Secondary meaning

 Use in commerce



Original works of

authorship fixed

in a tangible

medium of

expression



Secrets

 Efforts made

to keep

information

secret



Commercial

value



New

 Non-obvious

 Useful

 Subject matter

restrictions



Full disclosure

Type of

Protection



Protection against

consumer

confusion



Dilution



Exclusive rights to

perform,

distribute, display,

reproduce, make

derivative works



Misappropria

tion is

forbidden



Right to prevent others

from making, using,

selling, offering to sell,

importing

Period of

Protection



Perpetual, unless

abandoned



70 years after the

creator’s death, or

the last creator’s

death

 Works made for

hire: 120 years

after creation; or

95 years after first

publication



Until no

longer secret



20 years from filing date

 14 years for design

patents

Costs of

Protection



Registration filing

fees



Registration filing

fee



None, except

costs to keep

information

secret



Fees and costs,

maintenance fees

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Trademarks

Trademarks are used to identify the source or producer of goods and services

in a particular market. Trademark rights are secured and maintained through

commercial use of the mark, regardless of whether the mark is registered

with the USPTO. For example, one would have trademark protection simply

for using the trademark on the goods. However, trademarks that are not

registered are only protected in the territory in which the mark is actually

used.

Federal Trademark Registration Eligibility Criteria

1 Trademark must be distinctive

 A trademark is inherently distinctive if it is immediately capable of

identifying the product’s unique source.

 Hierarchy of distinctiveness (from strongest protection to weakest

protection):

1. Fanciful mark. A made up word (e.g., Kodak, Exxon).

2. Arbitrary mark. A random, common word arbitrarily chosen

as the trademark that does not describe the goods or services

(e.g., Apple (computers), Sprint (cell phones)).

3. Suggestive mark. A word that suggests, but does not describe

the characteristics of the goods or services (e.g., “Woolite”

(wool cleaner)).

 A trademark may also become distinctive by acquiring secondary

meaning through extensive and exclusive use over time, meaning that

a consumer automatically associates this trademark with the source of

the product. The following may only be registered if it has acquired

secondary meaning:

o descriptive marks = the word describes the qualities,

characteristics, functions, purpose, or other features of the

goods or services (e.g., Chap-Stick, Raisin-Bran);

o generic marks;

o marks that are deceptively misdescriptive of the goods or

services;

o geographically descriptive marks; and

o a surname.

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2 Actual use of the mark in commerce or intent to use the trademark

in connection with the goods/services listed in an intent-to-use

application

 If you have not started to use the mark in commerce, you can submit

an intent-to-use application, but will later be required to submit a

Statement of Use before the mark can be registered.

3 The following are not registrable:

 functional elements of the product or package design;

 marks that are disparaging to any persons or institutions;

 marks that falsely suggest an association with any persons or

institutions;

 immoral, deceptive, or scandalous marks; and

 marks about which the USPTO finds that the applied for mark, when

used for the goods or services covered by the application, is likely to

be confused with a prior registered or applied for mark.

What are the advantages of registering the trademark with the USPTO

even if registration is not required?

 Constructive notice to the public of your ownership of the mark;

 a legal presumption of your ownership of the mark and your exclusive

right to use the mark nationwide on or in connection with the goods

or services (or both) listed in the registration;

 the ability to bring an action concerning the mark in federal court;

 ease of registration in foreign countries; and

 the ability to file the U.S. registration with the U.S. Customs Service to

prevent importation of infringing foreign goods.

tangible medium of expression, such as paper, computer memory, or other

medium. Copyright protection is available only for the original expressions of

ideas, but not the ideas or concepts themselves. For example, one can copy

the recipes in an older recipe book to create your own recipe book as long as

the text in the subsequent book is original. Furthermore, even if two works

are similar or even completely identical, there is no copyright infringement if

the second author independently created his own work and did not actually

copy the earlier work.

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Should You Register Your Copyright?

The work does not need to be published or registered to obtain copyright

protection. Ownership of a copyright automatically vests in the creator(s) of

the work. However, registration is required if you want to bring a copyright

infringement action in federal court, and statutory damages are only

available if your copyright was registered before the infringement or within

3-months after the work was first published.

However, many companies choose not to register their copyright for several

reasons. Each individual work, including each new version or edition, must

be separately registered. Furthermore, registering the work requires at least

partial disclosure of the work to the public. Companies who are concerned

about confidentiality may choose not to register their work, but instead to

protect the material as a trade secret. Registration is really necessary only if

you plan to sue someone for copyright infringement. You may still send

cease-and-desist letters to infringing third parties even if your copyright is

not registered.

What If An Employee Created The Work?

Although the creator of the work automatically owns the copyright, one

exception to this general rule covers items known as works made for hire. To

qualify as a work made for hire, the work must be either:

 created by an employee within the scope of their employment for this

company; or

 specially commissioned, but there must be a written agreement

between the creator and the commissioning party specifying that this

work is work made for hire and all rights belong to the commissioning

party.

If the work qualifies as a work made for hire, the employer or the

commissioning party of the creator owns the copyright.

What Protections and Rights Do You Get if You Own the Copyright?

 The owner of the copyright enjoys the exclusive right to:

o reproduce the work (including copies);

o create derivative works based on the original work;

o distribute copies; and

o display or perform the work publicly.

 The owner of the copyright may license any or all of these exclusive

rights to another party, on an exclusive or non-exclusive basis.

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Trade Secrets

Trade secret protections can apply to business, financial, or technical

information that is kept secret by the creator. Certain trade secrets may also

qualify for copyright protection or patents. For example, a company may

choose to protect a computer source code by keeping it a trade secret and

maintaining confidentiality, or it may also protect it under copyright law or

patent this code. However, the company loses trade secret protection if the

information becomes generally known or ascertainable (e.g., if the company

chooses to register the copyright and some portion of the code is deposited in

the Library of Congress, if a patent is issued, or if the patent application is

published).

Criteria for Trade Secret Protection

1 The information is not generally known or ascertainable outside of the

owner's organization and control.

2 The owner derives economic value or business advantage from the

information not being generally known.

3 The owner makes reasonable efforts to preserve its secrecy.

What Rights Do You Get If You Own the Trade Secret?

Owners of a trade secret can bring a lawsuit for misappropriation of the trade

secret. Example include:

 a current or former employee’s misuse or improper disclosure of the

information;

 physical or electronic theft of documents; and

 breach of confidentiality agreement.

How Do You Maintain Trade Secret Rights?

The owner of a trade secret must make reasonable efforts to preserve the

secrecy of this information within his organization, and also among third

parties who need to use the information. Such third parties may include

vendors, suppliers, and customers. The owner of trade secrets should have

effective security measures and use written confidentiality agreements with

everyone who has access to the information.

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Patents

Patents offer the patent holder a monopoly over the use of the patented

invention. A patent holder has the right to exclude others from making, using,

or selling the invention within the U.S. or importing the invention into the U.S.

A patent owner may also license its rights to others on an exclusive or non-

exclusive basis.

The patent application remains confidential with the USPTO for 18 months.

The USPTO publishes most utility patent applications—if they are still

pending—18 months after the filing date. If the USPTO rejects a patent

application, the applicant can appeal to the USPTO’s internal Patent Trial and

Appeal Board.

Is Your Invention Patentable?

Utility patent applications must meet the following requirements in order to

be granted a patent:

1 Must fall within the categories of patentable subject matter:

 Process;

 Machine;

 Manufactured goods; and

 Composition of matter.

The Federal Circuit has carved out exceptions from these four categories that

are not patentable:

 Laws of nature;

 Physical phenomena; and

 Abstract ideas.

However, the Federal Circuit has also held that some abstract ideas may be

patentable if the claims contain an inventive concept sufficient to transform

the claimed abstract idea into a patent-eligible application of the idea. See the

USPTO note on Patent Subject Matter Eligibility for more guidance.

2 First-to-file

The first inventor to file an application to the invention gets patent rights

regardless of who may have actually invented it first.

3 Prior Art

Cite any relevant prior art of which inventor is aware.

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4 Disclose & describe in detail at least one embodiment of the

invention

The invention must be explained along with the process of making and using

the invention in full, clear, concise, and exact terms to allow any person of

ordinary skill in the industry to make and use the invention without

extensive experimentation.

5 Enumerate the specific claims to be granted

The claim(s) must specifically claim the subject matter that the inventor

regards as the invention. The claims define the scope of the protection of the

patent.

6 Invention must be novel

Your invention cannot be patented if the claimed invention was:

 already patented, described in a printed publication, or made available

to the public (e.g., by public use or for sale); or

 described in another patent issued or in another patent application

that was filed before your patent application.

If the inventor himself has publicly disclosed his invention (by publication or

made available to the public for use or sale), he has one year to file a patent

application before losing the ability to obtain patent protection.

7 Invention must be non-obvious

The claimed invention must be sufficiently different from the prior art such

that the invention is non-obvious to a person having ordinary skill in the

area. A patent may be refused even if the invention is not exactly shown by

the prior art, but involves only one or more obvious differences over the prior

art.

For example, the substitution of one color for another or changes in size are

ordinarily not patentable.

For more information about filing a utility patent, see the USPTO note on

General Information Concerning Patents and the USPTO Patent Application

Filing Guide.

Other kinds of patents:

 plant patents (protects distinct and new varieties of plants); and

 design patents (for new, original, and ornamental designs).

[17]

How Do You Challenge the Validity of a Patent That Has Already Been

Issued in the USPTO?

Ex parte reexamination. Any person at any time may request that the

USPTO reexamine a patent based on prior art and printed publications.

Post-grant review. Any person, except the patent owner, may file a petition

for a post-grant review within 9 months after the patent issue date.

Inter partes review. Any person, except the patent owner, may file a petition

for a review based ONLY on the ground that the challenged patent is not

novel or is obvious in view of prior art or printed publications. The petition

must be filed after the later of:

 9 months after the patent issue date; or

 the termination of any post-grant review of the challenged patent.

Transitional business method patent post-grant review. This is available

only if there is a patent infringement claim against the petitioner.

Submission of information to the USPTO. Any person at any time may

submit:

 prior art; or

 statements by the patent owner in federal court or the USPTO.

To Maintain Patent Protection

 maintenance fees; and

 articles made or sold under a US patent must be marked with “patent”

or “pat.” and the assigned number(s), or patent holder must provide

the patent number and product information on a publicly accessible

website.

[1]

Non-Disclosure Agreement

This Employee Non-Disclosure Agreement (“Agreement”) is entered into

between [Employer Name], a [State of Incorporation or Location] [Type of

Entity], (the “Employer”) and [Employee Name] (the “Employee”) (the

Employer and the Employee are collectively referred to throughout this

document as the “Parties”) on [Date] (the “Effective Date”).

In consideration

of the Employee's employment by the Employer, the Parties

agree as follows:

1 Confidentiality

1.1 Confidential Information. The Employee understands and

acknowledges that during the course of employment by the

Employer, [he/she] will have access to and learn about confidential,

secret and proprietary documents, materials, data and other

information, in tangible and intangible form, of and relating to the

Employer and its businesses (“Confidential Information”).

iii

1.2 Commercial Value. The Employee further understands and

acknowledges that this Confidential Information and the Employer's

ability to reserve it for the exclusive knowledge and use of the

Employer is of great competitive importance and commercial value

to the Employer, and that improper use or disclosure of the

Confidential Information by the Employee will cause irreparable

harm to the Employer.

1.3 Scope. For purposes of this Agreement, Confidential Information

includes, but is not limited to, all information not generally known to

the public, in spoken, printed, electronic or any other form or

medium, relating to the Employer or its businesses or of any other

person or entity that has entrusted information to the Employer in

confidence.

1.4 Other Information. The Employee acknowledges that the above list

is not exhaustive, and that Confidential Information also includes

other information that is marked or otherwise identified as

confidential or proprietary, or that would otherwise appear to a

reasonable person to be confidential or proprietary in the context

and circumstances in which the information is known or used.

1.5 New Information. Confidential Information developed by the

Employee in the course of [his/her] employment by the Employer

Non-Disclosure Agreement

[2]

will be subject to the terms and conditions of this Agreement as if

the Employer furnished the same Confidential Information to the

Employee in the first instance.

1.6 Public Information. Confidential Information will not include

information that is generally available to and known by the public,

provided that such disclosure to the public is through no direct or

indirect fault of the Employee or person(s) acting on the Employee's

behalf.

2 Disclosure and Use Restrictions

2.1 Employee Duties. The Employee will:

(A) treat all Confidential Information as strictly confidential;

(B) not directly or indirectly disclose, publish, communicate or

make available Confidential Information

vii

, or allow it to be

disclosed, published, communicated or made available, to any

entity or person not having a need to know and authority to

know and use the Confidential Information in connection with

the business of the Employer; and

any resources containing any Confidential Information, or

remove any such resources from the premises or control of the

Employer, except as required in the performance of the

Employee's authorized employment duties to the Employer or

with the prior consent of an authorized officer acting on behalf

of the Employer.

2.2 Legal Disclosures; Employee Rights

(A) Nothing in this document will be construed to prevent

disclosure of Confidential Information as may be required [or

permitted] by applicable law or regulation, or pursuant to the

valid order of a court of competent jurisdiction or an authorized

government agency. The Employee will provide written notice

of any such order to an authorized officer of the Employer

within [Number] [hours/days] of receiving such order, but in

any event sufficiently in advance of making any disclosure to

permit the Employer to contest the order or seek confidentiality

protections.

(B) This Section does not, in any way, restrict the Employee from

exercising protected rights to the extent that such rights cannot

Non-Disclosure Agreement

[3]

be waived by agreement, or otherwise disclosing information as

permitted by law.

viii

2.3 Duration of Confidentiality Obligations. The Employee

understands and acknowledges that [his/her] obligations under this

Agreement will commence immediately upon the Employee first

having access to such Confidential Information and will continue

during and after [his/her] employment by the Employer until such

time as such Confidential Information has become public knowledge

other than as a result of the Employee's breach of this Agreement or

breach by those acting in concert with the Employee or on the

Employee's behalf.

3 Proprietary Rights

3.1 Work Product. The Employee acknowledges and understands that

all [writings, works of authorship, technology, inventions,

discoveries, ideas and other work product of any nature whatsoever,

that are created, prepared, produced, authored, edited, amended,

conceived or reduced to practice by the Employee individually or

jointly with others] during the period of [his/her] employment by

the Employer and relating in any way to the business or

contemplated business, research or development of the Employer

(regardless of when or where the Work Product is prepared or

whose equipment or other resources is used in preparing the same)

and all printed, physical and electronic copies, all improvements,

rights and claims related to the foregoing, and other tangible

embodiments thereof (collectively, “Work Product

“), as well as any

and all rights in and to copyrights, trade secrets, trademarks (and

related goodwill), patents and other related intellectual property

rights arising in any jurisdiction throughout the world and all related

rights of priority under international conventions, including all

pending and future applications and registrations, and

continuations, divisions, continuations-in-part, reissues, extensions

and renewals thereof (collectively, “Intellectual Property Rights”),

will be the sole and exclusive property of the Employer.

xii

3.2 Employer Information. For purposes of this Agreement, Work

Product includes, but is not limited to, Employer information [such

as . . . .].

xiii

4 Work Made for Hire; Assignment

4.1 Acknowledgement. The Employee acknowledges that, to the extent

permitted by law, all of the Work Product consisting of copyrightable

subject matter is “work made for hire” as defined in the Copyright

Non-Disclosure Agreement

[4]

Act of 1976 (17 U.S.C. § 101), and such copyrights are therefore

owned by the Employer.

xiv

4.2 Employee Assignment. The employee assigns to the Employer, for

no additional consideration, the Employee's entire right, title and

interest in and to all Work Product and Intellectual Property Rights

therein, including the right to sue, counterclaim and recover for all

past, present and future infringement, misappropriation or dilution

thereof, and all corresponding rights throughout the world.

4.3 Employer Rights. Nothing contained in this Agreement will be

construed to reduce or limit the Employer's rights, title or interest in

any Work Product or Intellectual Property Rights so as to be less in

any respect than that the Employer would have had in the absence of

this Agreement.

5 Further Assurances; Power of Attorney

5.1 Employee Assurances. During and after [his/her] employment, the

Employee will reasonably cooperate with the Employer [at the

Employer's expense

xvi

] to:

(A) apply for, obtain, perfect, and transfer to the Employer the Work

Product and Intellectual Property Rights in the Work Product in

any jurisdiction in the world; and

(B) maintain, protect and enforce the same, including, without

limitation, executing and delivering to the Employer any and all

applications, oaths, declarations, affidavits, waivers,

assignments, and other documents and instruments as will be

requested by the Employer.

5.2 Power of Attorney. The Employee grants the Employer power of

attorney to execute and deliver any such documents on the

Employee's behalf in [his/her] name and to do all other lawfully

permitted acts to transfer the Work Product to the Employer and

further the transfer, issuance, prosecution, and maintenance of all

Intellectual Property Rights therein, to the full extent permitted by

law, if the Employee does not promptly cooperate with the

Employer's request (without limiting the rights the Employer will

have in such circumstances by operation of law).

5.3 Cooperation After Employment. The power of attorney is coupled

with an interest and will not be affected by the Employee’s

subsequent incapacity.

xvii

Non-Disclosure Agreement

[5]

6 Moral Rights

xviii

To the extent any copyrights are assigned under this Agreement, the

Employee waives, to the extent permitted by applicable law, any and all

claims the Employee may now or hereafter have in any jurisdiction to all

rights of paternity, integrity, disclosure, and withdrawal and any other

rights that may be known as “moral rights” with respect to all Work

Product and all Intellectual Property Rights therein.

xix

7 No License

The Employee understands that this Agreement does not, and will not be

construed to, grant the Employee any license or right of any nature with

respect to any Work Product or Intellectual Property Rights or any

Confidential Information, materials, software, or other tools made

available to [him/her] by the Employer.

8 Security and Access

The Employee will comply with all Employer security policies and

procedures

as in force from time to time (“Facilities Information

Technology and Access Resources”).

9 Exit Obligations

Upon (i) voluntary or involuntary termination of the Employee's

employment or (ii) the Employer's request at any time during the

Employee's employment, the Employee will:

9.1 provide or return to the Employer any and all Employer property

and all Employer documents and materials belonging to the

Employer

xxi

and stored in any fashion, that are in the possession or

control of the Employee; and

9.2 delete or destroy all copies of any such documents and materials not

returned to the Employer that remain in the Employee's possession

or control.

xxii

10 Publicity

10.1 Employee Consent. Employee consents to any and all uses and

displays, by the Employer and its agents, of the Employee's name,

voice, likeness, image, appearance, and biographical information

xxiii

at any time during or after the period of [his/her] employment by

the Employer, for all legitimate business purposes of the Employer

(“Permitted Uses”).

Non-Disclosure Agreement

[6]

10.2 Indemnity. Employee releases the Employer and its directors,

officers, employees and agents from any and all claims, actions,

damages, losses, costs, expenses, and liability of any kind in

connection with any Permitted Use.

xxiv

11 Acknowledgement

11.1 Services Rendered. The Employee acknowledges that the services

to be rendered by [him/her] to the Employer are of a special and

unique character; that the Employee will obtain knowledge and

skill relevant to the Employer's industry, methods of doing business

and marketing strategies by virtue of the Employee's employment;

and that the terms and conditions of this Agreement are reasonable

under these circumstances.

11.2 Compensation for Services. The Employee further acknowledges

that the amount of [his/her] compensation reflects, in part,

[his/her] obligations and the Employer's rights under this

Agreement; that [he/she] has no expectation of any additional

compensation, royalties or other payment of any kind not

otherwise referenced in this document; that [he/she] will not be

subject to undue hardship by reason of [his/her] full compliance

with the terms and conditions of this Agreement or the Employer's

enforcement thereof; and that this Agreement is not a contract of

employment and will not be construed as a commitment by either

of the Parties to continue an employment relationship for any

certain period of time.

xxv

11.3 *Note: [For at-will employees: Nothing in this Agreement will be

construed to in any way terminate, supersede, undermine or

otherwise modify the at-will status of the employment relationship

between the Employer and the Employee, pursuant to which either

the Employer or the Employee may terminate the employment

relationship at any time, with or without cause, with or without

notice.]

xxvi

12 Remedies

12.1 Acknowledgement. The Employee acknowledges that the

Employer's Confidential Information is of great competitive

importance and commercial value to the Employer, and that

improper use or disclosure of the Confidential Information will

cause irreparable harm to the Employer, for which remedies at law

will not be adequate.

Non-Disclosure Agreement

[7]

12.2 Event of Breach. In the event of a breach or threatened breach by

the Employee of any of the provisions of this Agreement, the

Employer will be entitled to seek, in addition to other available

remedies, a temporary or permanent injunction or other equitable

relief against such breach or threatened breach from any court of

competent jurisdiction, without the necessity of showing any actual

damages or that monetary damages would not afford an adequate

remedy, and without the necessity of posting any bond or other

security.

12.3 Relief. The equitable relief will be in addition to, not in the place of,

legal remedies, monetary damages or other available forms of

relief.

13 Successors and Assigns

13.1 Assignment by the Employer. The Employer may assign this

Agreement to any subsidiary or corporate affiliate [in the Employer

or otherwise], or to any successor or assign (whether direct or

indirect, by purchase, merger, consolidation or otherwise) to all or

substantially all of the business or assets of the Employer. This

Agreement will inure to the benefit of the Employer and permitted

successors and assigns.

13.2 No Assignment by the Employee. The Employee may not assign

this Agreement or any part hereof. Any purported assignment by

the Employee will be null and void from the initial date of

purported assignment.

14 Severability

14.1 Validity of Agreement. Should any provision of this Agreement be

held by a court of competent jurisdiction to be enforceable only if

modified, or if any portion of this Agreement will be held as

unenforceable and thus stricken, such holding will not affect the

validity of the remainder of this Agreement, the balance of which

will continue to be binding upon the Parties with any such

modification to become a part of this Agreement.

14.2 Modification. Any such court is expressly authorized to modify any

such unenforceable provision of this Agreement in lieu of severing

such unenforceable provision from this Agreement in its entirety,

whether by rewriting the offending provision, deleting any or all of

the offending provision, adding additional language to this

Agreement or by making such other modifications as it deems

warranted to carry out the intent and agreement of the Parties as

Non-Disclosure Agreement

[8]

reflected in this document, to the maximum extent permitted by

law. This Agreement as so modified by the court will be binding

upon and enforceable against each of them.

14.3 Validity after Modification. In any event, should one or more of

the provisions of this Agreement be held to be invalid, illegal or

unenforceable in any respect, such invalidity, illegality, or

unenforceability will not affect any other provisions, and if such

provision or provisions are not modified as provided above, this

Agreement will be construed as if such invalid, illegal or

unenforceable provisions had not been set forth in this

document.

xxvii

15 Miscellaneous Provisions

15.1 Arbitration. Any dispute, controversy or claim arising out of or

related to this Agreement or any breach of this agreement will be

submitted to and decided by binding arbitration. Arbitration will be

administered exclusively by [Selected Arbitration Organization]

and will be conducted consistent with the rules, regulations and

requirements thereof. Any arbitral award determination will be

final and binding upon the Parties.

xxviii

15.2 Governing Law. This Agreement, for all purposes, will be

construed in accordance with the laws of [State] without regard to

conflicts-of-law principles.

xxix

15.3 Jurisdiction and Venue. Any action or proceeding by either Party

to enforce this Agreement will be brought only in any state or

federal court located in the state of [State][, county of [County]].

The Parties submit to the exclusive jurisdiction of such courts and

waive the defense of inconvenient forum to the maintenance of any

such action or proceeding in such venue.

xxx

15.4 Entire Agreement. Unless specifically provided, this Agreement

contains the final and exclusive agreement between the Parties

pertaining to its subject matter and supersedes all prior and

contemporaneous understandings, agreements, representations

and warranties, both written and oral, with respect to such subject

matter.

xxxi

15.5 Modification and Waiver. No provision of this Agreement may be

amended or modified unless the Employee and [a duly authorized

officer of the Employer (other than the Employee)/[Position]]

agree to such amendment or modification in writing. No waiver by

either of the Parties of any breach by the other party of any

Non-Disclosure Agreement

[9]

condition or provision of this Agreement to be performed by the

other party will be deemed a waiver of any provision at the same or

any prior or subsequent time, nor will the failure of or delay by

either of the Parties in exercising any mentioned right, power or

privilege operate as a waiver to preclude the exercise of any other

such right, power or privilege.

15.6 Captions. Captions and headings of the sections and paragraphs of

this Agreement are intended solely for convenience and no

provision of this Agreement is to be construed by reference to the

caption or heading of any section or paragraph.

15.7 Counterparts. This Agreement may be executed in counterparts,

each of which will be deemed an original, but all of which taken

together will constitute one and the same instrument.

In witness whereof, the Parties have executed this Agreement as of the

Effective Date above.

[Employer Name]

By:______________________________________

Name: [Name of Authorized Officer]

Title: [Title of Authorized Officer]

[Employee Name]

Signature:____________________________

Print Name: ___________________________

Non-Disclosure Agreement

[10]

Entrepreneurs should strongly consider having their employees sign Non-Disclosure

Agreements (“NDA”) to protect the employer’s confidential and commercially valuable

information and to retain ownership of intellectual property. More information on NDAs for

entrepreneurs can be found here: http://www.entrepreneur.com/article/228140.

The employer must provide consideration for the employee’s obligations under this NDA.

This document assumes that the employee signs the agreement at the beginning of new

employment. If the employee is already employed at the time of signing the NDA, the

employer should research whether there is sufficient consideration under state law for this

agreement to be enforceable.

iii

The lists in these sections which describe the employer’s confidential information should

be modified to reflect the employer’s business and industry. The employer should also note

any relevant third parties with confidential information that the employee might access.

Employers should explain why the protected information needs to be kept confidential

(e.g., because the information has commercial value to the employer and gives the employer

a competitive advantage).

An employer should customize the definition of confidential information according to the

nature of its business and industry and to be narrowly tailored to the employer’s business.

This will help to ensure that the agreement is enforceable. The employer may wish to specify

materials that are relevant to the employment, such as trade secrets, customer lists,

research, terms of agreements, software design, business practices, techniques, information,

potential transactions, financial information, and information about pricing, marketing,

advertising, sales, customers, personnel, etc.

Here courts will look at: (1) What information the employee can access during the normal

course of business; and (2) Whether the employee is required to obtain authorization to

access any of the material in this section.

vii

An employer may grant the employee authorization to use or disclose confidential

information depending on: (1) The employer’s business organization and management

structure; (2) The nature of employee’s position and job responsibilities; or (3) The

importance of the particular confidential information at issue.

viii

An employer should ensure that the disclosure and use restrictions meet its legitimate

business needs, taking the definition of confidential information into account. Employers

seeking to preserve trade secrets may want to limit the disclosure of that information to a

specified group of individuals who need the information to perform their jobs.

Time limits on the duration of a confidentiality agreement generally are not required for

enforceability.

Sections 3 and 4 are important to ensure that the employer retains ownership of its

intellectual property and that employees do not take that intellectual property and use it for

purposes not in the employer’s interest.

Customize this section based on what applicable terms fall into the employee’s work

product.

Non-Disclosure Agreement

[11]

xii

Employers should tailor this to include specific types of proprietary work product that

employees might produce in the course of their employment.

xiii

The employer should specify the definition of employer information here with types of

documents or material to which the employee will have access, such as inventions, research,

product plan and designs, and information about customers, manufacturing, marketing,

advertising, sales, etc.

xiv

More information on work made for hire can be found at

http://copyright.gov/circs/circ09.pdf.

This section includes a present assignment of the employee’s interest in all other work

product and IP rights to ensure that the employer owns the IP.

xvi

The employer typically covers these expenses, but it may choose not to include this

language (although this may affect the employees’ efforts to comply with anything beyond

signing documents).

xvii

Here, the employee agrees to assist the employer to the extent necessary to protect the

employer’s interest in the work product and IP rights. The employer may need the

employee’s assistance, even after employment, when seeking to obtain certain IP rights or

enforcing those rights.

xviii

Moral rights are statutory rights that give a copyrighted work’s author the right to be

identified as the author and to object to any distortion, mutilation or other modification of

the work.

xix

This provision ensures that the employer can rely on the agreement as constituting a

waiver of all moral rights relating to copyrighted works created during employment. For

more information about moral rights, you may visit:

https://cyber.law.harvard.edu/property/library/moralprimer.html.

Employer should customize this section with any security procedures including passwords

or restricted access measures at the place of employment.

xxi

Employer may wish to customize these materials with relevant items.

xxii

Employer should include specific references to employer property and every location and

device where confidential information or work product might be stored and consider the

employer’s specific storage, filing, documentation, IT and security practices.

xxiii

Employer may wish to specify with details of the future publicity.

xxiv

This is an optional publicity provision and might not be relevant to the employer’s

business. If that is the case, it can be removed from the agreement. Employers should also

consider whether they want to include a non-disparagement clause that prohibits

defamatory statements about a company’s products and services or officers (although the

latter may be not enforceable if overly broad).

xxv

It is recommended that employers include an acknowledgment within the confidentiality

and proprietary rights agreement to minimize the risk of later disputes with the employee,

especially with regard to the terms of at-will employment (if applicable).

Non-Disclosure Agreement

[12]

xxvi

Use this language only if the employee is at-will. For at-will employees, employers also

have the option of integrating confidentiality and proprietary rights obligations provisions

into an employment agreement.

xxvii

This provision will help to ensure that the remainder of the agreement is enforceable

should any of its provisions be declared otherwise.

xxviii

Include this provision only if the employer wishes to resolve disputes through

arbitration. Before including an arbitration clause, employers should review relevant state

law to determine whether arbitration clauses in the context of employment are enforceable.

xxix

When choosing the state law to govern the agreement, employers should choose the law

of a state to which the employment in question bears some relationship. For example, the

state in which the employer is located or where the job duties will be performed would be a

reasonable basis for choosing the law of that state. Other considerations for the employer,

when selecting states for governing law include: (1) The state with the most beneficial laws

for the employer; (2) The Employer’s convenience; and (3) Does the employer have a better

understanding of the law in any particular state?

xxx

Employers should consider whether to draft the agreement to favor enforcement in one

jurisdiction exclusively or to allow for some flexibility with jurisdictions.

xxxi

Employers can modify this section if they wish for other agreements with the employee

to be enforceable.