I need a assignment done for week 9 assignment 3 for my New Business Venture and Entrepreneurship
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 575 RTC – Week 9 Lecture Notes (1188) Page 1 of 5
JWI 575 New Business Ventures and Entrepreneurship
Week Nine Lecture Notes
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 575 RTC – Week 9 Lecture Notes (1188) Page 2 of 5
INTELLECTUAL PROPERTY What it Means Intellectual property – also known as IP – is a key concept for protecting your competitive advantage and delivering value to your customers. How can you prevent others, including your competitors, from stealing your innovative idea and developing their own product or service based on the concept? Initially, like most inventors, you may protect your idea by keeping it secret. You only share the details of your idea with trusted friends and family members. However, once you start developing a prototype that uses the idea in a product or service, it can become very difficult to continue keeping your idea hidden. If you do well in the marketplace and start making money, your competitors will be looking for the concept behind your success.
Your idea is not a tangible item, but it is nonetheless an intellectual asset or item of property that belongs to you, and the law recognizes it as such. There are several ways to record and legally protect your idea, including trademarks, copyright protection, and patents. These are all legal protections that enable you to sue for infringement if another company attempts to use your idea for profit. We examine how the different forms of protection work and consider the pros and cons of each approach. This lecture also includes a table that provides you with a quick reference for the four major types of intellectual property.
Why it Matters
• Innovators must learn to see their ideas as intellectual assets that constitute property • If new ideas are not well protected, competitors will take advantage of their availability • Valuable ideas should be protected by one or more types of intellectual property protection
“A startup should unequivocally own or unequivocally have licensed its intellectual property.”
Guy Kawasaki
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THE BASICS OF INTELLECTUAL PROPERTY
If you have a way of delivering value, and would-be competitors learn about it, what is to stop them from using your idea and taking your customers away? In some cases, you might offer good service, which anyone can try to copy. But in other cases, you have an innovative and original idea and this can be protected.
Four Types of Intellectual Property
Protectable ways of operating are referred to as intellectual property. The four most common types of intellectual property are trade secrets, trademarks, copyrights, and patents. To protect your innovation, it is recommended that you safeguard your idea with one or more types of intellectual property protection, before you start marketing the new product or service.
Trade Secrets
Inventors have an instinctual desire to keep their new ideas secret. To market their inventions securely, they should ideally apply for trademark, copyright, or patent protection. However, these protections include some cost and an approval process. So the inventor may simply opt to keep the idea a closely guarded secret.
One famous example of a trade secret is the formula for Coca-Cola. Coke could have patented its formula, but its patent would have lasted only 17 years, the limit at that time. After that, the formula would have been public knowledge, available to any competitor. So, instead of filing for a patent, Coke chose to keep the recipe a tightly guarded secret. To this day, Coke still hides the formula, even from its own bottlers and vendors.
Trademarks
A trademark is a distinctive logo, symbol, name, character, sign, or mark that identifies a product or service marketed by a specific company. Some well-known examples include the name Coco Chanel, the swoosh symbol on Nike shoes, and the talking gecko character used in Geico’s advertising and marketing.
Copyrights
Copyright is granted for written, spoken, or performed words or music. It does not protect a specific invention, but rather a specific expression of an idea. Every book is copyrighted, for example, as are many images.
Patents
The U.S. Patent and Trademark Office (USPTO) grants patents in the United States. If you take out a patent, it excludes others from copying your invention for a certain period of time. The invention can be a device, drug, food item, clothing design, and many other things. A patent may be classed as a utility patent or a design patent. A design patent relates to how the item looks, whereas a utility patent relates to how the item works. For example, a design patent would protect a new pattern for a wedding dress, whereas a utility patent would protect a new type of seat belt for cars. The vast majority of patents issued each year are utility patents.
Today a patent in the U.S. lasts for 20 years, and the inventor is required to publish the patent. Effectively the government makes a deal that rewards the inventor for his or her idea, but allows the broader community to benefit too. It is as if the government says to each inventor: “Teach the world how to do what you have invented,
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 575 RTC – Week 9 Lecture Notes (1188) Page 4 of 5
and in exchange, you will get to enjoy 20 years of excluding others who might use this invention, unless they pay you for the privilege.”
The Starbucks Example
For a real-life example to illustrate all four types of intellectual property, imagine you are walking down the street and see the familiar green circular logo. You know that you are about to enter a real Starbucks coffee shop.
• That logo is trademarked. No other cafe can hang the logo on its storefront and attempt to attract Starbucks customers.
You then might sip some coffee prepared in a special machine that Starbucks has designed.
• That coffee machine is patented. No other cafe can buy and use that particular coffee machine.
You enjoy the relaxing ambiance in the Starbucks cafe. Maybe Starbucks has developed some customer service training for its employees, designed to give their cafes a special feel that is distinct from their competitors. These training materials could be protected in two different ways:
• Those training materials might be legally protected by copyright.
• If they do not apply for copyright protection, Starbucks may instruct its managers not to share the training materials outside the company. In this case, they are treating their training as a trade secret.
A Guide to Intellectual Property
The table below provides an overview of the four types of intellectual property, displaying some key information about each type and the protection it offers to innovators.
Type of Intellectual Property
What is Protected?
Competitors May Not:
Term of Protection
Cost
Patent
Utility Functional aspects Make, Use, Offer, Sale, or Import
20 years Expensive
Design Ornamental features
15 years Moderate
Trademark Brand Use Commercially
Period varies, limited by use
Inexpensive
Copyright Works of Authorship
Reproduce or Sell Life plus 70 years Inexpensive
Trade Secret Information Misappropriate (steal ideas)
No legal protection, limited by secrecy
Varies
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GETTING THE MOST OUT OF THIS WEEK’S CLASS
As you read the materials and participate in class activities, stay focused on the key learning outcomes for the week:
• Understand the value of intellectual property for a new venture
The concept of intellectual property is very important for an innovator, and especially so for entrepreneurs striving to build a new business. In today’s fast-moving marketplace, where information can be disseminated widely and quickly via the Internet, it is crucial to recognize that your innovative idea is a form of property that you created and now own. Since your idea has the potential to be a valuable possession, assuming that your business venture becomes profitable, it makes sense to establish protection for the idea at an early stage of business development.
• Learn how ideas can be protected using patents, copyright, and trademarks
While most people have heard the terms patent, trademark, and copyright, many do not understand how these legal protections actually work. Yet, in the business world, these are key concepts that are used to protect a wide range of ideas and assets. The Starbucks example described above illustrates how many types of intellectual property protection one company can use to protect its innovative ideas. Now that you know how these legal protections work, consider your innovation and the original concept that led to its design. How would you protect your “big idea” in the marketplace? Which type of intellectual property protection would make the most sense for you to use, and why?
• Explore and discuss your learning from the Tio Gazpacho case
Throughout the course you have been following the story of Austin Allan and his startup company, Tio Gazpacho. This week you have the opportunity to reflect upon your learning from this video-based case and to discuss with your peers some ways in which that learning might help you in your studies or at your workplace. Make the most of this discussion, which goes way beyond this week’s topic of intellectual property to encompass any aspect of the entrepreneur’s journey that resonates with you.