Common Investor Pitfalls with Intellectual Property

and how to avoid them

Your hostsHeidi BrunJoint Head of Patent Department Eitan, Mehulal & Sadot

Zack MillerPartner, Investor Community OurCrowd

Many types of Intellectual Property (IP)

Many types of IP• Patents

• Trademarks

• Designs

• Copyrights

• Trade Secrets

Different types of companies have different

IP needs

Many types of IP

Trade Secret vs. Patent

Due Diligence

Due Diligence• Ownership

• Technology

• Claims

• Where filed

Ownership Issues• Company ownership vs. inventors

• Employees vs. contractors (particularly for software)

• Inventor’s willingness to sign assignments

• Patent laws in various countries vs. US law

Ownership Research• Online at various patent

offices

• Search via company name, inventor names

• http://assignments.uspto.gov/assignments/q?db=pat

Ownership Research

Ownership Research

Technology

Technology• Is it brand-new tech? Or, improvement of a

successful one?

• Does the company have a new take on an old idea?

• How do the claims compare to the product? Are they on only a small part of the product? If so, is this still good?

• What claims/patents do competitors have?

Big vs. small inventions

Big vs. small inventions• Startups concentrate on their BIG inventions

• Do they have other good (smaller) ideas hiding in the patent applications?

• Don’t always claim what can be claimed — applications may have valuable inventions described in applications that haven’t been claimed

Large number of applications/patents

• Is this good? Does it mean that the company is innovative?

• Yes — the company has many ideas

• No — the company is good at defining its one invention in many ways (which may be good…)

• Remember: Some startups write patents knowing investors don’t read them

Technology Research I• Patentability search — Google Patents:

Advanced Search

Technology Research I

Technology Research II• Proviso 1 — any patents found, have to be provided to

USPTO, ILPTO

• Proviso 2 — patents found in search may have broad claims that company’s products may infringe. Need to deal.

• Need to decide for yourself if:

• current claims will issue

• current claims are useful to the company

• current claims are useful to your plans for the company

Patent Portfolios

Patent Portfolios I• Multiple inventions

• Filings in multiple countries

• US only or around the world?

• US investors have a bias to US filings

• On the other hand — the company may file in many countries

• without realising the huge maintenance cost

Patent Portfolios II

• When money runs tight, a startup won’t keep up its patent portfolio

• Investors may have to jump in to keep rights active

Patent Portfolios Research

• Search in Espacenet, Dialog, Thomson-Reuters etc. for patent families

• Check status and any close dates — will the company be able to keep applications alive

Patent Portfolios Research

Patent Portfolios Research

Patent Portfolios Research

Property

• Patents have value which outlives the company

• Patents have a market

Heidi M Brun

Eitan, Mehulal & Sadot +972-2-633-5021 +972-9-972-6000 heidib@ems-legal.com www.ems-legal.com

Zack Miller

OurCrowd +972-2-636-9000 +1-914-617-1026 zack@ourcrowd.com www.ourcrowd.com

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