Alex's IP Checklist

Part 1 (of many)

At HeyCounsel, we’re so impressed by the lawyers who’ve joined our community, and we’re always looking for ways to show them off.

Each week, we will publish an article written by one of our community members about a topic at the intersection of early stage growth and legal strategy - topics near and dear to our platform lawyers’ hearts.

This week, Alex Slafkosky, IP counsel of Scale LLP, writes about early-stage IP strategy. Enjoy!

Alex's IP Checklist

by Alex Slafkosky

I have talked to hundreds of founders about their IP strategy. Most know it's a crucial piece of the puzzle, but they often don't know how to orient themselves at the earliest stages. Some are even familiar with the nuances of certain IP issues based on prior experience, and many would like to tackle these items with a DIY approach. What I tell most of my clients is a variation of "some items can be pushed out, some should be checked often, some come with traps, and some are time sensitive. It's important to know what's what, and its' important to have a roadmap and a cadence to check in every 6 months or so.”

With that being said, here are some things to think about when considering different IP protections for your company's assets. In this first part, we’ll briefly go over copyright and patent protection. 

Copyright

Strong at stopping someone from copying your expressive work, but only for your exact expression…

Let's start with the easiest one first – copyright. Copyrights can be used to stop others from copying your work. We see these types of legal fights all the time – artists fighting over music, Google and Oracle fighting over Android APIs, and, the new darling, creators suing LLM model developers. The good news is that your copyright vests when you write your code, make a hardware prototype, or create your content. All it requires is a minimally creative act that fixes your "original works of authorship" into any "tangible medium of expression." Save your code, bend metal, or post that marketing content — easy, peasy, lemon squeezy.

So, once you’re done creating your thing, does that mean you’re all set? Not quite! Certain benefits come with federal registration at the U.S. Copyright Office. For instance, you cannot sue someone in federal court until a copyright application is registered for the work. Luckily, the U.S. Copyright Office charges relatively minor fees and has informational fliers about filing a copyright application (for your specific type of thing) through a website … that looks like it was last updated in the 90s. I tell my clients they can do it – no need to pay me, but I am happy to fill out the form and do it if you want me to.

It’s also important to know where copyright protections begin and end. Copyrights only protect the author's expression as embodied in the work itself. You do not get protection for the ideas, procedures, processes, systems, concepts, discoveries, facts, etc. To protect parts of these, we next turn to patents.

Patent

Strong at stopping someone from copying your ideas, but only if you can get a patent granted!

I am a patent nerd. So, I will fight the urge to dive straight into obscure nuance. A granted patent protects an invention – an idea conceived by you, an inventor. You can sue a competitor for infringement of a granted patent and ask the court for damages or an injunction. They can be powerful tools! But notice how I said, "granted patent?" Yeah, this is limited to inventions that the U.S. Patent and Trademark Office (USPTO) deems worthy.

You have 2 basic options and many strategies to protect your inventions with patents. The 2 options are utility patent and design patent.^[1] They both basically use the same rules for whether the Examiner will grant you an issued patent after they have reviewed your patent application: Is your invention novel and non-obvious?^[2] I'll pause here, not to scare you, but to inform you. You must file before or within 1 year (called a "bar date") of public disclosure, offer for sale, or a sale of a product or service that covers your invention. If you file after the bar date, the invention is, legally, not novel anymore. You have created your own prior art to block your patent.

Design Patents.

Design patents protect the ornamental design of an article of manufacture. It can be a pattern for a fabric, a shape of a car headlight, or a graphical user interface, and the list of things goes on forever. These are relatively less expensive than utility patents. The most important thing for design patents is the set of figures you file (and get granted). That is your inventive claim.

Utility Patents.

Granted utility non-provisional patents protect claims to processes, machines, manufactures, or compositions of matter. Claims are a set of sentences that describe features of your invention. When you file your non-provisional application, you file it with a set of claims. This is what the Examiner will review for, among other things, novelty and non-obvious. Examination of a patent application is a negotiation – you ask for what you want and haggle over what scope (if any) the Examiner will allow. You also file a specification and figures. This is your description of your invention and technology. The features of your claims must map 1-to-1 to part(s) of the application, while features in your specification or figures don't have to be in the claims. You can move features from your specification or figures into the claims or remove features from your claims – but you cannot add features from outside the application.

"This all sounds awfully complicated, Alex," I hear you say. Yes, that is why utility non-provisional patent applications cost $10k-$20k (or more!) to draft, file, and negotiate to allowance. They cost even more after allowance. To grant the patent, the USPTO requires an issue fee and, to keep a patent in force, the USPTO requires periodic maintenance fees.

Provisional Patents

The good news for early-stage companies is that you can file a provisional patent application and give yourself some runway (up to 1 year from your filing date) before these fees start. These usually cost much less than non-provisional applications because you only prepare and file them. There is no negotiation, grant, or maintenance fees. You don't have to draft claims, though I would recommend it. You don't have to formalize the figures, though they should be clear and legible. You don't have to draft the specification in a specific manner, though some structure would be nice. A provisional application is a technical description for a filing date. Its purpose is to give you a set of features you can later map 1-to-1 to claim features. So, technical depth and optionality are the goals for a provisional application, though you can file a PowerPoint or a single paragraph.

To be Continued

That was a lot – is the IP checklist done yet? No, we still need to walk through trade secrets, trademarks, confidential data and NDAs, government data rights, SBIR rights, NIL, right of publicity, IP licenses, infringement risk for our products versus other people's IP, freedom to operate or clearance opinions, invalidity opinions, and IP provisions of founders documents, employment contracts, contractor agreements, joint development agreements, manufacturer agreements, software reseller agreements, and the list goes on…

Running an IP checklist or doing an IP audit can be an effort, but it can be a great source of value for an enterprise. This is especially true as early-stage enterprises move through the lifecycle to funded, growth, and exit. The IP assets uncovered and protected can be used in different ways at different stages, such as to protect your enterprise, secure funding, or juice an exit or IPO.

So, let's not be afraid to look under our Excel sheet of product features and see what gems we already have in hand.

Disclaimer: The information in this blog post ("post") is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice of the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient's state, country or other appropriate licensing jurisdiction.

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^[1] I’m purposefully omitting plant patents and non-US varieties that don’t map really well to the US domain of patents.

^[2] I’m going to leave some thornier rules to the side, as they could be full posts by themselves. For example, is our invention described in enough detail? Is our claim clear enough? For fintech or other business-related inventions, is this invention of the right “stuff” to be the subject matter of a patent? This one is messy, but I love a good fintech or business method patent. It just takes creativity to rephrase and refocus how our technology is solving a technical problem!