Protecting the Idea and Other

Legal Issues for the Entrepreneur

Chapter 6
 What is Intellectual Property?

• It includes patents, trademarks, copyrights, and

trade secrets.
• These represent important assets to the
entrepreneur.
• Often entrepreneurs ignore important steps that
they should have taken to protect these assets.
• Intellectual property should be understood even
before engaging the services of an attorney.
Intellectual property
 How to Select a Lawyer
• An entrepreneur needs to be aware of any
regulations that may affect a venture.
• A lawyer may work on a allowance basis or may
be hired for a one-time fee.
• A good working relationship with a lawyer:
– Eases some of the risk in starting a new business.
– Gives the entrepreneur necessary confidence.
• Entrepreneur can offer the lawyer stock in
exchange for services.
 Patents
• Patent
An exclusive right granted for an invention. Grants holder protection from others
making, using, or selling similar ideas.
It means that the invention cannot be commercially made, used, distributed,
imported or sold by others without the patent owner's consent.

 Utility patent – Protection of new, useful, and unobvious processes,

machines, compositions of matter, and articles of manufacture.
The functions of a product (what it does)
term of 20 years. Ex: machines such as photocopiers.
 Design patent – Covers new, original, ornamental, and unobvious designs for
articles of manufacture;
term of 14 years (How it looks)
Eg: Shoe designs, plastic mold etc.
 Plant patent - Given for new varieties of plants. protects a new and
unique plant's key characteristics from being copied, sold, or used by others.
 Patents
• Domestic Patents
Department of Patents, Designs and Trademarks
Ministry of Industries 91, Motijheel C/A, Dhaka-
1000.
Website: www.dpdt.gov.bd
How to file a patent in Bangladesh?
https://dpdt.portal.gov.bd/sites/default/files/file
s/dpdt.portal.gov.bd/page/a3066a65_b68f_438
a_b916_7581f2abbaea/Patent%20file%20proce
dure.pdf
 Patents (cont.)
• International Patents
– The Patent Cooperation Treaty (PCT) was established to facilitate patent
filings in multiple countries in one office.

– It is administered by the World Intellectual Property Organization (WIPO) in

Geneva, Switzerland.

– WIPO is the global forum for intellectual property (IP) services, policy,
information and cooperation. A self-funding agency of the United Nations,
with 193 member states.

– It provides a preliminary search that assesses whether the filing firm will
face violations in any country.

– Differences may exists in the patent laws of each of these countries.

 Patents (cont.)

• The Provisional Application

– It is the initial application providing evidence of being the first
to market.

– Gives the rights to the patent based on the concept of first to

file.

– The actual filing of the patent in its final form must occur no
later than 12 months after the provisional disclosure document
is filed.

– Before actually applying for the patent, it is advisable to retain

a patent attorney to conduct a patent search. After the
attorney completes the search, a decision can be made as to
the patentability of the invention.
 Patents (cont.)

• The Patent Application

– Introduction – Consists of the background and advantages
of the invention, the problems that it overcomes, and how
the invention differs from existing offerings.
– Description of invention – Includes a detailed description
of the invention and of the drawings that accompany it.
– Claims - Specify what the entrepreneur is trying to patent.
– The application should contain a declaration signed by the
inventor(s).
One product many patent example:
https://www.patentlyapple.com/patently-apple/apple-watch/
 Patents (cont.)

• Patent Infringement
– Many businesses, inventions, or innovations are results
of improvements on, or modifications of, existing
products.
– Copying and improving on a product may be perfectly
legal and a good business strategy (not patent
infringement)
– If patent infringement is unavoidable, the entrepreneur
may try to license the product from the patent holder.
– It is advisable to hire a patent attorney to ensure there
is no possibility of infringement.
Options to Avoid Infringement
Checklist for Minimizing Patent Risks
 Business Method Patents
• The growth of Internet use and software development
has given rise to business method patents.
• Amazon.com owns a business method patent for the
single-clicking feature used by a buyer on its Web site
to order products.
• Firms use these patents as a defence from the
competitors and subsequently provide income from
royalties or licensing fees.
• Not all start-ups will have a product or concept that is
patentable.
 Trademarks
• A distinguishing word, name, or symbol used to identify a
product.
• A trademark protects a slogan, phrase, word, company name
, logo, or design that identifies a company and/or its goods.
• A logo used by a company that may fall under
trademark protection laws.
• Eg: McDonald’s arch
– It can last indefinitely.
– It can be filed solely on the intent to use the trademark in regional
or foreign commerce; also with the intent to use it in the future.
 Trademarks (cont.)
• Registering the Trademark
– Filing must meet four requirements:
• Completion of the written form.
• A drawing of the mark.
• Five samplings showing actual use of the mark.
• The fee.
– Upon receipt of this information, a serial number is made and a
filing receipt is sent to the applicant.
– An initial 3 months period is taken for examining at the authorities.
– If any objections, they must be raised within six months. The
entrepreneur has the right to appeal in case of refusal.
– Once accepted, the trademark is published in the Trademark
Official Gazette to allow any party 30 days to oppose or request an
extension to oppose. If no opposition is filed, the registration is
issued. This entire procedure usually takes about 13 months from
 Copyrights
• Copyright, a form of intellectual property
law, protects original works of
authorship including literary, dramatic, musical,
and artistic works, such as poetry, novels,
movies, songs, computer software, and
architecture.
• Term of the copyright is usually the life of the
author plus 70 years.
• In Bangladesh, register for copyrights at
http://www.copyrightoffice.gov.bd/
 Trade Secrets
• Provides protection against others revealing or
disclosing information that could be damaging
to business. Eg: The secret formula for Coca-
Cola locked in a vault.
– Trade secrets have a life as long as the idea or
process remains a secret.
– Employees may be asked to sign a confidential
information agreement.
– Entrepreneur needs to take proper precautions.
– Legal action is possible only after the secret has
been revealed.
 Licensing
• A contractual agreement giving rights to others to use intellectual property in
return for a royalty or fee.
• Types of licensing:
 Patent license agreements - Specify how the licensee would have access to the
patent.
– The licensor may manufacture the product but give the licensee the rights to market
it under their label in a noncompetitive market (i.e., foreign market).
– In other instances, the licensee may actually manufacture and market the patented
product under its own label.
– This agreement must be carefully worded and should involve a lawyer, to ensure the
protection of all parties

 Trademark license agreements - Involve a franchising agreement.

operates a business using the trademark and agrees to pay a fixed sum for use of the
trademark, pay a royalty based on sales volume, buy supplies from the franchisor.
Dunkin’ Donuts, Pepsi Cola

 Copyright license agreements - Involve rights to use or copy books, software, music,
photographs, plays, etc. Television shows have also licensed their names for board
games or computer games.
 Licensing (cont.)

• Factors to be considered:
 Will the customer recognize the licensed property?
 How well does the licensed property complement my products
or services?
 How much experience do I have with the licensed property?
 What is the long-term outlook for the licensed property? (For
example, the loss of popularity of a celebrity can also result in an
end to a business involving that celebrity’s name.)
 What kind of protection does the licensing agreement provide?
 What commitment do I have in terms of payment of royalties,
sales quotas, and so on?
 Are renewal options possible and under what terms?
 Insurance
• It provides a means of managing risk in the new
business.
• Some insurances are required by law and cannot
be avoided while others are may be necessary to
protect the financial net worth of the venture.
• Service-related businesses such as day-care
centres, amusement parks, and shopping
centres have had significant increases in the
number of lawsuits
Types of Insurance and Possible Coverage
Types of Insurance and Possible Coverage (contd.)
 Contracts
• The entrepreneur starting a new venture, will
be involved in a number of negotiations and
contracts with vendors, landlords, and clients.
• A contract is a legally enforceable agreement
between two or more parties as long as certain
conditions are met.
• It is very important for the entrepreneur to
understand the fundamental issues related to
contracts while also recognizing the need for a
lawyer in many of these negotiations.
 Contracts (cont.)

• Four essential items in an agreement to

provide the best legal protection:
– Understand the terms and conditions in the
contract.
– Cross out anything that you do not agree to.
– Do not sign if there are blank spaces (these can be
crossed out).
– Make a copy for your files after signing.

Last Slide