Homework due for today
Legend: : Participation | : Early | : PDF | : Team | : Zipped
- . Read There are several ways to make sure that your work is not stolen or copied. They each have certain benefits and costs. As an entrepreneur it’s important to understand each of them. These readings are a good place to start: What are Copyrights?, What are Trade Secrets?, What are Patents?. I will be asking for definitions and distinctions! Now, think about and respondn to these warmup questions:
- In the show Silicon Valley, the team from Pied Piper has perfected a new compression algorithm which works far more effectively than what came before. Should they employ Trade Secrets, Patents, Copyrights to protect their invention? Explain your reasoning. If you think they would use a combination, then explain how and why.
- Can you envision a scenario where you use both Patent and Trade Secret protection to protect the same product? Explain your response.
- What 1 or 2 important things from the reading did you not understand? And if you understood it all, then what 1 or 2 important things were most insightful/useful/valuable to you. Please make sure I can tell which is which!
- Deliverable: Answer these warmup questions in Latte
- Read: What makes for a successful startup Bill Gross on Success and Failure
- Weekly Team Update: Submit your Weekly Progress Updates according to the instructions. Team Deliverable: Weekly Progress Update
Continuing work
- Begin work on Stage 3: Should be completed on December 6. Look at the Term Project Outline. Now we are into the business issues. You will have talked and discussed this along the way. Who is your competition? How will you be different? How are you going to price and what is your financial analysis look like? And how will you plan to drive growth?
Interesting, not mandatory reading
Intellectual Property
Story: eRoom and intellectual property
- “What is your protectable intellectual property?”
- “How will you stop Microsoft from just ripping off your product?”
What mechanisms are there in the US to protect IP?
Patent:
Wikipedia: “A patent (/ˈpætənt/ or /ˈpeɪtənt/) is a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. An invention is a solution to a specific technological problem, and may be a product or a process.[1]:17 Patents are a form of intellectual property.”
- A patent:
- is expensive to prepare
- needs lawyers
- may or may not be granted
- will be expensive to ‘defend’
Trade Secret
Wikipedia: The precise language by which a trade secret is defined varies by jurisdiction (as do the particular types of information that are subject to trade secret protection). However, there are three factors that, although subject to differing interpretations, are common to all such definitions.
- a trade secret is information that:
- is not generally known to the public;
- confers some sort of economic benefit on its holder (where this benefit must derive specifically from its not being generally known, not just from the value of the information itself);
- is the subject of reasonable efforts to maintain its secrecy.
- A trade secret:
- is inherently present, simply by keeping a secret
- secret has to be truly unique not common sense or widely known
- needs to be managed with appropriate “NDA”
- is more defensible if properly kept secret
Copyright:
Wikipedia: Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time. Generally, it is “the right to copy”, but also gives the copyright holder the right to be credited for the work, to determine who may adapt the work to other forms, who may perform the work, who may financially benefit from it, and other related rights. It is a form of intellectual property (like the patent, the trademark, and the trade secret) applicable to any expressible form of an idea or information that is substantive and discrete.[clarification needed][1]
- A Copyright is:
- again is inherently present, by being the author of something
- can apply to many kinds of ‘work’, text, images, videos, user interfaces
- more difficult to defend as you go down the list
Examples to think about:
Discussion: Pair up with 3 others (groups of 4) and look at the list below. Discuss which kind of IP protection each item below would needm, and why. Come up with answers and reasoning for as many of the cases as you can in 15 minutes. Report outs from each group
- The Nest industrial design
- The clicking sound a Nest makes when you rotate it
- The use of two motion detectors inside the Nest
- Pito’s course curriculum documents (like this paper)
- Technique that Waze App uses to correctly predict my arrival time
- Coca Cola secret recipe
- Technique that Waze uses to collect and share individual cars’ position and velocity
- Protocols that Waze uses to communicate between smartphone and server
- HTTP Protocol specification
- The “aeron” chair
- Pivot Table feature in excel.
- The particular physical design of a USB-3 plug and jack
- The particulars of the USB-3 electrical interface and signal protocol
- The particular design of the new iPhone 5 “Lightning” connector
- The signals and protocols for each of the pinouts on the Lightning connector
- Bittorrent
Additional Topics
Protecting your IP and respecting others’ IP
- Licensing is a contract between two parties where I allow you to ‘use’ something that I own
- You need to decide what you ‘release’ and what you don’t. For example, do you release source code? Do you release your circuit diagrams, and so on. Whatever you ‘release’ you have to ‘protect’
- Two steps:
- First, make it protected, so you own it
- Second, grant someone else permission to use it in a controlled way, by licensing it
- Open Source and Creative Commons
- NDA
- Non disclosure agreement
- Entered in before a meeting where you will hear or tell secrets
- Required to preserve “trade secret” status
- FrieNDA
- Practical Issues for startups
- Stealth mode: Pros and Cons
- How do you get customer feedback if you can’t tell anyone?
- Who owns the IP, individuals or the startup?
A Made Up Story
Jan 2015: Chris is a senior in college, and has a great idea for a product, and spends senior year (spring term) working many hours refining the idea into a mockup. Senioritis, you know? Many discussions with other students improves and refines the idea.
October 2015: Chris’ friend Dana is interested in helping on the product. It turns out that Dana has experience from courses and also hacking on the side, and knows just how to build a working prototype.
It becomes a practically full time obsession for the two of them, and together Chris and Dana continue to refine the project and get feedback. During the summer and fall, Dana writes a lot of software, which is a central part of the project.
August 2016: Dana and Chris realize that they have a knowledge gap. Chris is the product visionary with strong technical chops. Dana is the hands-on coder and has developed a majority of the code.
However to be able to pay the bills they decide that they need to raise money and to have more business expertise. They have no clue how to do this, but a friend of a friend introduces them to Alex. They really hit it off with Alex, who is very experienced, has been involved in a startup before and knows several angels very well.
Questions to discuss with students near you. There are no correct answers. Imagine yourself in the actual situation and ask yourself what your position would be and how you would defend it:
- When do you think is the right time to start thinking about incorporating, realistically, and why?
- When do you think the three individuals should assign a ‘title’ to themselves
- what titles would you suggest, and why?
- Who do you think may legitimately call themselves a “founder”, a “co-founder”, or just an “early member of the team” and why?
- What is a fair way to allot ‘ownership’ to the three individuals and why?
Next Class