Friday, September 11, 2009

How to set up your IP

In the past couple episodes of ABC's "Shark Tank" (which itself is one version of a show called "Dragon's Den" in most countries), intellectual property has played a part. (Once again, the premise of the reality show is that businesspeople show their wares to self-made entrepreneurs who decide if they want to invest in the small business.)

One of the business men (who calls himself "Cactus Jack") decided to show all of his patents to the panel - ostensibly proving his value as an inventor and as a businessman who can make money on his inventions. One question I have been asked (though I do not practice patent law) is, "What percentage of patents make money?" The answer is hard-to-impossible to find, but the answer that I hear all the time is 5%. Where does that number come from? I wish I knew - I can't find it. But, needless to say, the point is that if the businesspeople behind the intellectual property are bad, then the intellectual property itself is bad. Now, Cactus Jack said he made $7 million on one product, which I think proves the point.

Another episode featured two women with a wonderful playpen cover. The issue that came out during the deal is that the patent was not a part of the business. The patent owners were the two women and the ex-husband of one of them. The problem there is that a person is a legal entity - but so is a corporation. So if a business is using the patent without an assignment or license from the owners, the business is technically infringing the patent.

This is something I see all the time. When a client comes to me anew, I always have to ask what the business plan is. How does the client see the intellectual property? When I am thrust in the middle of an issue, and I see that intellectual property at the USPTO is in the name of the owner, but not the corporation, I then have more issues to deal with.
  1. Who is my client?
  2. What assignments do I need to create and have executed?
  3. What side of those assignments am I allowed to be on?
So, the IP needs to be a part of the business.

If you're a current client of mine, I've made sure that your IP is a part of the business. That's only correct.

How is your IP set up? Is all your IP registered? If you have a question, send me one at


There seems to be a recent change in the definition of contributory trademark infringement. And I say "seems" because I am not sure of all the ramifications of a recent ruling. Louis Vuitton (which is a company that defends its IP) has sued some companies that host parked web pages. A parked page is one that only lists links to other companies on a domain name that might be popular for one reason or another (for example, a misspelling).

But, on second thought, maybe there's nothing new here - except the large amount of damages. Louis Vuitton alerted the company and the company with the parked pages still had infringing websites. It is the job of any company who is alerted to trademark infringement to not contribute to it.


A trademark client of mine was featured in the New York Daily News recently, and you can click here for that article.


Don't forget to become a fan of mine on Facebook at and follow me on Twitter at for daily updates and discussions on the world of intellectual property and entertainment law.

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