IP As A Business Tool

Intellectual Property as a Business Tool
Frisina, LLC
Creating Wealth Through Intellectual Property TM
www.frisinaIP.com
Copyright 2007-2011 Frisina, LLC
Introduction
453 South High Street

Suite 302
Akron, OH 44311
(330)338-0589 direct
dominic@frisinaIP.com
www.frisinaIP.com
Representative Sectors
Chemicals
Polymers
Pharmaceuticals
Biotechnology
Biomedical
Medical Imaging
Advanced Materials
Nanotechnology
Semiconductors
Medical Instruments
Medical Tests
Liquid Crystals
Power Generation
Fuel Cells
Software
Internet Law
Business Methods
Our mission is to create wealth for our clients through the

strategic use of intellectual property.
Our mission is to create wealth for our clients through the
strategic use of intellectual property. We understand the
challenges facing businesses, and strive to secure and
monetize our clients intellectual assets by couching sound legal
strategy in innovative IP and business intelligence. With our
combination of technical and legal expertise we are uniquely
positioned to guide clients through the legal maze of intellectual
property strategy facing both start-ups and more established
ventures.
Introduction
Patent Basics
From Conception to Capitalize
Offensive Strategy: Excluding Competitors
Defensive Strategy: Maintaining Your Freedom to Operate
Monetizing IP
Do I Need a Patent
Patent Basics
Patentable subject matter
Any useful process, machine, manufacture, or composition of matter
35 U.S.C. 101
Confers the right to exclude others from:

making, using, selling or offer to sell, or importing into the
United States
Patent Basics
Territorial
Only enforceable within the issuing nation
A foreign inventor can obtain a US patent and vice versa
Time-limited
Generally 20 years from the earliest effective filing date
Patent Basics: Statutory Bars

Certain acts can forfeit patentability
Public disclosure, sales, offers for sale, etc.
Time limits
one year grace period in the US
Immediate forfeiture in most foreign countries
Absolute novelty requirement
Patent Basics: Legalese

Legal Term Definition
Art: Any technology
Prior Art: Any technology preceding your invention that may preclude
patentability
Enabling: Providing enough information so that a person having
ordinary skill in the relevant art can make and use the
invention

IP: Intellectual Property including patents, trademarks,
copyrights, and trade secrets
Practice: Technology is practiced in the same sense that law
or medicine is practiced
Reduction to Practice: An invention is said to be reduced to practice when it
has been developed to such an extent that it could
be made using only ordinary skill in the art.

Assign: To transfer ownership
Technology Space: The space defined by a set of inventive variables.
(aka patent space)
(aka art space)
Technology Space
Robotics
Technology Space

Four Stages:
Conception
Proof-of-Concept
Commercialization
Enterprise
Concept Stage
Conception; The Idea Stage
Focus of Activities:
Investigating potential duty to assign

Determining the business model, and objectives
Assessing the patent landscape
Gathering resources: financial, technical, etc.
Maintaining secrecy
Sources of capital
Personal finances, credit cards, family and friends.
Concept Stage
The Business Model
Product: robotic devices for blister packing pills
Manufacturing: local (USA)
Markets: Worldwide, esp. USA, Europe, Japan, China
Distribution: inside sales directly to end users
Concept Stage
Assessing the Patent Landscape
Where is IP activity occurring in our patent space?
Who are the players?
How well resourced are my competitors?
What is my litigation risk in this patent space?
How well developed are my competitors patent portfolios?
How will the IP landscape change over the next 5-10 years?
Concept Stage
Concept Stage
Concept Stage
Concept Stage
State-of-the-art search (a/k/a
collection search)
All patents in a given technology
space
Includes summary statistics and
visualizations
Concept Stage
Recap
Determined the business model, and long-term objectives
Assessed the patent landscape
Gathered resources: financial, technical, etc.
Maintained secrecy
Proof of Concept Stage

Proof-of-Concept
Initial R&D to determine feasibility

prototyping
Likely to engage consultants and/or contractors
IP acquisition
May need outside funding

Sources of funding:
Personal resources
Some state, local, and private funding sources are available
but it is very competitive e.g. JumpStart, LCCC/if * (25k/100k),
Third Frontier
*Lorain County Community College Innovation Fund

Incubators
Akron Global Business Accelerator (AGBA), GLIDE, Kent
Regional Business Alliance, MAGNET, etc.
Can be a great way to
Build business relationships

Get coaching
Get facilities
Get funding leads

Initial R&D and prototyping
DIY
Contract services:
Scientific, engineering or other consulting firms
Use NDAs and NCs until a patent application is filed

IP Candidates:
Technology A: blister pack grabber
Technology B: blister pack loader
Technology C: blister pack sealer

IP Acquisition
Strategically selecting technologies for patenting
Patent Availability/Novelty Searching
IP Intelligence Gathering
Preparing a patent application(s)

IP Candidate Selection is based on
Patent Availability Opinion
Freedom to Operate (FTO)
IP Intelligence Report
Our Choice:
Technology A: blister pack grabber

Patent Application Filed
We are free to openly promote/disclose our invention
BUT BE CAREFUL
Trade secrets
Subject matter not contained in the as-filed patent application
Commercialization
Potential new funding issue
Acting on the business model with our long-term objectives in
mind
Making products
Setting up distribution
Selling products
Commercialization
Sources of funding
SBA Loans for moderate requirements
State/local/private grants and/or loans
VC and Angel investors
Commercialization
Outsourcing versus manufacturing in-house
Outsourcing is an attractive option for new market entrants
In-house Manufacturing:
Is a rare skill or specialized facility required?
Is the risk of disclosing your know-how is too great?
Is manufacturing very low volume?
Enterprise Stage
Concerns and Opportunities
Sales growth
IP Strategy
Never stop innovating
Offensive Strategy
Offensive Strategy
Exercising the right to exclude others
Beyond reserving your niche
Populating a patent space with a patent family

Offensive strategic planning should include
Business executives, Legal, and R&D
Offensive Strategy: Patent Space
Offensive Strategy
Raise competitors cost of doing business
Legal costs, R&D costs, operations costs
Using NPEs to your advantage

Non-Practicing Entities (aka Patent Trolls)
Sell/assign your IP but retain an exclusive license
Let the troll litigate and pocket the proceeds
Offensive Strategy
IP abatement insurance policy
Pays for the cost of enforcement
Enforcement
Enforcement begins with a C&D letter
Litigation may be necessary
Force a settlement
Litigate
Defensive Strategy
Defensive Strategy
The best defense is a good
offense
Yogi Berra
Defensive strategy is also risk

management
Risk of having to sue others
Risk of being sued
Defensive Strategy
Risk Management; Preventative measures
Patent availability searching
Identifying potentially
problematic art
Draft around,
Flag for design around, or
Abandon early
Freedom to Operate (FTO)
IP purchases or licensing-in
Contract
Non-Compete agreements
Joint Development Agreements
Defensive publication
Defensive Strategy
Defending against patent infringement
Self-financed defense
IP Insurance
defense policy
defense and indemnity policy
Defensive patent aggregation services

Primarily for large entities
Defensive Strategy
RPX Corporation www.rpxcorp.com
Monetizing IP
Monetizing IP
Sale or Licensing-out
Non-core technology,
Non-productive technology
Non-threatening technology
IP auction houses
www.redchalkgroup.com
www.adaptipventures.com
www.patenttransferltd.com
Monetizing IP
Securitization of IP
Bond issue
Backed by licensing or royalty revenues
Existing income stream required
ipCapital Group (www.ipcg.com)
Monetizing IP
Commercial lending
IP as collateral; must have explicit value
10-40% LTV
Many banks do not make pure IP loans
Angel investors or venture capital

Usually based on the IPs speculative or implicit value
Warning: VCs want to be in the drivers seat
Do I Need a Patent?
Do I Need a Patent?
Is a trade secret more appropriate?
Consider patentability (new, useful and nonobvious)
Consider the product life cycle
Is your true interest exclusivity or stamping patent pending on your product
Consider the difficulty of reverse engineering or independent development
Cost benefit analysis

The cost of patenting (or failing to patent) versus the benefit conferred
Do I Need a Patent?
Cost/Benefit:
1. How much money do I stand to make?

a)
b)
c)
d)
What would it cost to develop a product embodying the invention?

What would it cost to manufacture and market the product?
How much can I charge for the product?
What is the size of the market for the product?
2. versus without a patent?
Do I Need a Patent?
If the difference between your share of the market with exclusivity versus without is greater than the
cost of patenting then a patent is worth while. (e.g. initially about 5K plus up to an additional 15 to
20K over several years).
Do I Need a Patent?
Recap:
1.How much money do I stand to make?
a)
b)
c)
d)
What would it cost to develop a product embodying the invention?

What would it cost to manufacture and market the product?
How much can I charge for the product?
What is the size of the market for the product?
2. versus without a patent?
Additionally:
3. Do I intend to seek capital investors?
IP is generally required
When to Patent
Conception
Proof-of-Concept
Enterprise
Factors:
Stage of development
Activity of your Competition
Cost versus resources on hand
Thank You
For Further Information
www.frisinaip.com
Newsletters
IP Owl Blog
Slide Shows
Contact Me
(330)338-0589 Direct
dominic@frisinaip.com

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Intellectual Property as a Business Tool

Copyright 2007-2011 Frisina, LLC

453 South High Street

Our mission is to create wealth for our clients through the

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Confers the right to exclude others from:

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Patent Basics: Statutory Bars

Copyright 2007-2011 Frisina, LLC

Patent Basics: Legalese

Copyright 2007-2011 Frisina, LLC

Patent Basics: Legalese

Copyright 2007-2011 Frisina, LLC

Patent Basics: Legalese

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

From Conception to Capitalize

Copyright 2007-2011 Frisina, LLC

From Conception to Capitalize

Copyright 2007-2011 Frisina, LLC

Investigating potential duty to assign

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Initial R&D to determine feasibility

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Build business relationships

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Use NDAs and NCs until a patent application is filed

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Proof of Concept Stage

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Copyright 2007-2011 Frisina, LLC

Populating a patent space with a patent family

Copyright 2007-2011 Frisina, LLC