An IP Protection Primer for Entertainment Tech Startups

The tech-heavy entertainment industry is an active field for tech startup companies developing potential patents and trade secrets. But many cash conscious startups are forced to initially neglect protection planning for these intellectual property assets, instead allocating scarce resources to set up and initial operation costs. This article suggests some practical and economical steps for startups, especially those with tight finances, to protect what may become valuable patents and trade secrets.

Patents protect inventions that are new, useful and non-obvious. The three main categories of patents are utility patents, design patents, and business method/software patents. A utility product patent protects how a product is used, made, its function or structure. A utility process patent protects the inventive method of use or operation.

Patents are territorial, meaning a startup seeking international protection for its inventions needs to obtain protection in each country or jurisdiction. However, international treaties allow inventors to get the benefit of their priority filing date by filing a patent application in any member country. This allows startups to defer costs of protecting its inventions.

The first step in securing U.S. and international utility patent protection for a startup is as simple and inexpensive as filing a provisional patent application, which provides one year for the startup to test and get traction for its invention in the market. At the end of the year, the startup needs to decide the countries in which it will seek protection. If the startup needs even more time at the end of the year, it can “buy” an additional 18 months of time with its international priority date preserved by filing a Patent Cooperation Treaty application, see, www.wipo.int/pct/en/.

Design patents protect non-functional aesthetic and decorative features of products, but do not describe the invention in words, as utility patents do. Rather, design patents show the non-functional aesthetic and decorative features of products in drawings. Keep in mind that many appearance and aesthetic aspects of products can be protected by design patents — even software is protectable by design patents. For example, the appearance of Graphic User Interfaces that make products more intuitive, attractive and enjoyable can be design-patent protected. Design patents are inexpensive to obtain and can be a very lucrative asset. A well-known example of a successful assertion of a design patent is the ongoing patent infringement litigation in which Apple got a jury award of hundreds of millions of dollars over Samsung's infringement of Apple's iPhone icons. (Some aspects of the award will be addressed in a new trial scheduled for May 2018. Apple v. Samsung Electronics Co. Ltd., 11-CV-01846 (N.D.Calif).) Compared to utility patents, design patents are inexpensive and quick to issue.

Business method patents are a category of utility patents and can cover the way a company does business, including non-technical processes. Following a period of uncertainty as to their patent eligibility, it is now clear that, despite being subject to heightened scrutiny, software and business method inventions are indeed protectable under U.S. patent law. Examples of business method patents obtained in the 1990s and early 2000s ordering products online, advertising management systems and electronic shopping. More recent examples include electronic trading of stocks, bonds, futures, options and similar products, and producing accurate and realistic lip synchronization and facial expressions in animated characters.

Trade secret protection can be achieved with minimal expenditure of resources. Trade secrets protect confidential business information, which provides a business with a competitive edge, including know how, customer lists, business methods and the like. There is no legally set protection period for a trade secret; a trade secret is subject to legal protection for as long as it is kept a secret. Startups should consider trade secret protection for their valuable information, especially information for which it may be difficult to obtain patent protection.

Effective protection of trade secrets need not tax a startup's scarce finances. Rather, trade secrets can be protected by implementing simple, cost-efficient procedures that keeps the information from becoming available to the public.
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Dr. Dariush Adli is founder and president of ADLI Law Group in Los Angeles. His practice includes business and intellectual property litigation, media and entertainment law. He can be reached at [email protected].