Whether protected through copyright, trade secret, trademark, or patents, software technology companies depend on IP more so than perhaps any other business type in history.
It is surprising, then, just how little founders think about protecting their own IP. Sure, “product-market fit” is an all-engrossing search for truth that tolerates no distraction, but that is at best an explanation, not an excuse.
The real pros will find product-market fit while documenting and protecting IP along the way — it’s the only way to ensure you own your work, after all.
This article provides an overview to help you think about where your IP sits, how to protect it, and how to avoid certain pitfalls that plague far too many startups.
This is the second article in the Extra Crunch exclusive “Startup Law A to Z” series, following my article on corporate matters last week. I will avoid full repetition here, but briefly, the purpose of this series, alongside other Extra Crunch resources, is to provide you enough information to analyze your business circumstances and evaluate your legal risk exposure to common legal issues facing startups, such as corporate matters, IP, business transactions, compliance/regulatory, and HR. If you see legal risks in these or related areas, you can consult the Verified Expert list of best startup lawyers and reach out for help — it’s that simple.
The Legal IP checklist:
- Founder pre-existing IP
- Employee Confidential Information & Intellectual Property Assignment agreements
- Independent Contractor/Consulting Services agreements
Protecting IP ownership
- Licensed IP and modifications/improvements
- Current or previous employers (see Cal. Labor Code §§ 2780-2782)
Strategic IP Portfolio
- One-year statutory bar
- Provisional patent application
- International protection
- Software patents under Alice v. CLS Bank
- Offense and defense against patent trolls
- Preserve confidentiality
- Limit and control access
- Check USPTO trademark database
- Secure federal trademark registration for enforcement
- Not merely descriptive
- Original work of authorship
- Secure federal copyright registration for enforcement
- Understand ‘Fair Use’
Read on for our detailed breakdown of each of these items.
IP, legally speaking
From a high level, IP rights provide their owners the ability to legally prevent others from using certain technology or other protected assets. IP is essentially a property right that can be sold and assigned to others in the same way that vehicles, houses or any other form of tangible property can be bought and sold. Startups should think about IP along the lines of a portfolio specifically created to protect their particular business goals and strategy, in light of competitive market forces.
Boeing 737 MAX packed with journalists completes first flight
Boeing was hit very hard when the US government banned its 737 MAX passenger airliner for 20 months. On Wednesday, the aircraft staged its first flight with media onboard since the fleet was grounded by the government. Boeing is desperate to show passengers and airliners that the 737 MAX is safe and ready for operation.
The test flight was conducted by American Airlines and spent 45 minutes traveling from Dallas, Texas to Tulsa, Oklahoma. The test flight was conducted weeks before the first commercial passenger flight will happen on December 29. Boeing and American Airlines held the flight to help eliminate any concerns about aircraft safety.
The massive aircraft was grounded in March 2019 after two crashes happened within five months, killing 346 people. The media flight was the first time anyone other than regulators and industry personnel flew on the 737 MAX since it was grounded. The flight had roughly 90 people aboard, who all wore masks due to the coronavirus pandemic.
Boeing’s aircraft was cleared by the FAA last month after the aircraft received design changes and new training for pilots. Boeing needs the aircraft’s return to service to go very smoothly as the aircraft is critical for the company’s reputation and finances. Hundreds of billions of dollars are on the line, with airlines worldwide having spent hundreds of billions of dollars purchasing aircraft.
Reports indicate that the aircraft has been discounted significantly to help lure carriers who may be wary of the aircraft to purchase. Boeing has a 24-hour situation room that monitors every 737 MAX flight globally. The company says it will continue to work closely with global regulators and customers to return the fleet to service safely.
Facebook might finally be sued by the US government next week
The political landscape in the US hasn’t yet stabilized almost a month after one of the most important elections in its recent history. It is perhaps because of that state of flux that government officials under the current administration are moving quickly to wrap things up while they can. Last month saw Google formally sued for monopolistic business practices and TikTok’s fate could very well be decided this Friday. Next week will see yet another high-profile legal drama when the US government slaps Facebook with an antitrust lawsuit of its own.
It seems almost ironic that Facebook would be the last Big Tech company this year to get formally sued considering it was one of the first to get into legal trouble with the US government. Although the Trump administration formally started inquiries and investigations into Google, Facebook, Apple, and Amazon only last year, Facebook’s name has already been dragged into the spotlight right after the previous presidential election. But while those previous issues centered around election interference and privacy, this lawsuit will instead focus on anti-competitive practices.
Reuters sources aren’t yet certain on what points the lawsuit will include but it is almost certain that it will involve its acquisition of Instagram and WhatsApp. The social media giant has been accused of buying up smaller rivals in order to gain monopoly of the market. Facebook argued that it actually helped those become market leaders instead.
Given its already negative reputation in the public’s and the government’s eyes, Facebook might face an uphill battle to make judges see things from its point of view. It doesn’t help its case that, despite the numerous scandals it has been involved in, Facebook remains a powerhouse and influential company, even with the competitors that the social media giant says disproves allegations of monopoly.
According to one source, as many as 40 states will sign the lawsuit that will be filed next week. The FTC is also reportedly considering filing a separate but related complaint with a district or administrative law judge. No date for the FTC’s lawsuit has been shared.
Google News Showcase tries to address the paywall elephant in the room
While many praise and thank Google for making information and news available to the masses on the Internet, others, especially publishers, hate it for almost the same reason. Some have even sued Google for putting directly in Search results content that should otherwise be viewed on the content owner’s website. And then there’s paywalled content that effectively blocks users from accessing those without paying a fee. In order to better promote its News platform, Google is negotiating with publishers in order to provide some locked content to readers for absolutely no charge at all.
To be clear, Google isn’t just making available paywalled content for free at the expense of publishers that own them. It will be the one publishing partners that are taking part in this relatively new Google News Showcase program. Even then, only select articles will be made available for free, pretty much like a trial or appetizer.
There are, however, more caveats to this seemingly generous offer. The biggest one for people will be the requirement to still register for each and every publisher they want to view paywalled content from. This, Google says, is so that publishing partners can build relationships with readers, which is to say that they will send you regular communications (read: spam) to convince you to sign up and pay for a subscription.
Another limit of this paywall program is that Google News Showcase itself isn’t available in all regions of the world. Google only names Germany, Brazil, Argentina, France, the UK, and Australia as some of the few but it is working to expand its reach to more countries. Courting US publishers might be trickier than in other countries.
Google is also working to expand Showcase beyond Android and iOS to Google News on the Web and its Discover feature. Together with a new panel for curating important local and national news from users’ favorite publishers, Google is more aggressively pushing its platform as the new way people could get their daily news fix and not from Facebook or Twitter.
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