Bill Hulseys Patent Lawyer is the founder of HULSEY PC and practices in Austin, Texas and Memphis, Tennessee. Bill Hulsey Patent Lawyer established HULSEY PC to apply a highly developed specialty and experience in a broad span of technical fields. Bill Hulsey Patent Lawyer takes great pride in serving emerging growth companies competing in global markets with products and services relating to renewable and sustainable energy technologies, life sciences, electronics, environmental innovations, software, and aerospace technologies.

1. 1Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III

2. 2Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III

3. 3Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III

4. 4Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III

5. 5Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Creation and
Management for Emerging Growth
Technology Companies
Introduction to
Trademarks & Copyrights

6. 6Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Creation and
Management for Emerging Growth
Technology Companies
Introduction to
Trademarks & Copyrights

7. 7Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
William N. Hulsey III, Esq.
HULSEY Intellectual Property Lawyers, LLP
www.hulseyiplaw.com
Creating, Managing, and Licensing
Intellectual Property Assets
Course 2.
Intellectual Property in Business Transactions
Module 6 (Part 1):
IP and the Engineering Professional

8. 8Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Course 2 Outline
• Patent Analysis & Financial Performance. Module 1
Part 1
• Patent Analysis & Financial Performance. Module 2
Part 2
• Intellectual Property in the Module 3
Semiconductor Industry
• Intellectual Property Capture & Auditing Module 4
• Patents, Trade Secrets, Trademarks & Module 5
Copyrights: A Functional Perspective
• IP and the Engineering Professional Module 6
• Conclusion: Looking Forward Module 7

9. 9Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

10. 10Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

11. 11Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

12. 12Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

13. 13Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

14. 14Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

15. 15Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

16. 16Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

17. 17Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

18. 18Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

19. 19Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

20. 20Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Meets
The Sarbanes-Oxley Act
• Sarbanes-Oxley became
effective on July 30,
2002
• Rules enacted and/or
proposed
– SEC
– NYSE
– NASDAQ
• Public discussion
– Non-regulatory bodies
• ABA
• Rating Agencies
• Financial Standards Boards

21. 21Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & Sarb-Ox
• Implications for IP asset management
– Disclosure
– Certification
– Disclosure Controls
– Internal Control Report
• Ethics
– Code of Ethics
– Whistleblower
• Review of Intellectual Property
Management Practices

22. 22Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Disclosure Requirements:
Statutory Certification
• Sections 906 and 302 require the CEO and CFO to
certify:
– The information contained in the periodic report fairly
represents in all material respects the financial condition
and results of operations of the company.
– Section 302 applies to each annual or quarterly report
– Section 906 applies to periodic reports containing financial
statements
• Penalties
– Statutory criminal penalty of up to $1 million and 10 years
imprisonment for knowing violations
– Up to $5 million and 20 years for willful violations

23. 23Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Sarb-Ox Certification Requirements &
I.P. Assets
• Intellectual assets must be reported if
– They impact the financial condition of the company
– They enable investors to evaluate the full picture of
the company
• CEO / CFO participation
– Knowledge of the IP portfolios
– Aware of transactions
– Understanding of enforcement, third party claims
• Accounting policies
– Guidelines for valuation
– Rules for transactions

24. 24Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Capital Drives
Financial Capital
FINANCIAL FOCUSFINANCIAL FOCUS
HISTORY
Customer FocusCustomer Focus Process FocusProcess Focus
Renewal & Development FocusRenewal & Development Focus
TODAY
TOMORROW
OPERATING ENVIRONMENT
IC
Human
Focus

25. 25Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Value Creation—Inventory at Source Value Extraction---Convert to Capital
Human Capital
Experience
Know-how
Skills
Creativity
Leveraging Human Capital
Tools to Direct the Inventive
Mind
Systematic Methodologies to
identify, extract, document
Human Capital
Experience
Know-how
Skills
Creativity
Leveraging Human Capital
Tools to Direct the Inventive
Mind
Systematic Methodologies to
identify, extract, document
Intellectual Assets
Programs Methodologies
Inventions Documents
Processes Drawings
Databases Designs
Intellectual Assets
Programs Methodologies
Inventions Documents
Processes Drawings
Databases Designs
Intellectual Property
Patents
Enabled Publications
Copyrights
Trademarks
Trade secrets
The Intellectual Capital Balance Sheet

26. 26Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

27. 27Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Rights Overview
Know How
Trade Secrets
Patents
Copyrights
Trademarks
IP

28. 28Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Executive
Offices
IP
Management
Research &
Development
General
Counsel
Marketing
Business
Development
Finance
Licensing
Patent
Maintenance
Information
Services
R&D Staff
IP Legal
Litigation
Patent
Prosecution
Product
Management
Mergers &
Acquisitions
Competitive
Intelligence
Corporate Intellectual
Property Assets
Where’s Your Company’s I.P.?

29. 29Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
A Patent is a Contract
With the Government:
• The inventor teaches the world about his
invention . . .
and in return,
• . . . the inventor gets the right to exclude
others from practicing the invention for 20
years from the filing date.
The Pieces & How They Fit

30. 30Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Requirements for a Patent
A process or device that is:
• Useful
• Novel
• Not obvious/
Inventive Step
The Pieces & How They Fit

31. 31Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Certain Categories Are Not
Patentable:
• Laws of nature
• Natural phenomena
• Abstract ideas
and until recently…
• Business methods
Patent Rights

32. 32Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
• The technical barriers will drop almost to zero in
many markets, with more pressure to use IP law for
commercial advantage.
• Intellectual property will dominate product
differentiation in commodity markets.
• The highest market valuations will go to
companies that have a competitive advantage in the
form of assets that are difficult to reproduce legally
Consider The Power of Patents . . .
Patent Rights

33. 33Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
• Injunction: One claim in one patent can put you out
of business.
• Damages: 3 times actual for willful infringement.
• Economics: The cost of getting a good patent is
a lot less than the cost of defending even a small
patent suit.
Consider The Power of Patents . . .
Patent Rights

34. 34Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
•Intellectual property rights, especially patent
rights, protect recurring business income from
competitive threat.
•The financial community may figure out how
to value intangible assets (e.g., patents and
other forms of intellectual property) on
corporate balance sheets.
Consider The Power of Patents . . .
Patent Rights

35. 35Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property & The Practicing Engineer:
10 Rules of the Road to Engineering Professionalism
1. Understand why intellectual property is important for your company
& your career
2. Know what the intellectual property laws protect.
3. Know what are your obligations regarding your company’s
intellectual property rights
4. Understand the basics of capturing intellectual property
5. Understand how your engineering creativity can translate into
intellectual property creativity
6. Be familiar with technology commercialization concepts
7. Be familiar with I.P. valuation concepts
8. Know how your work affects others’ intellectual property rights
9. Know what to do when you change jobs to do similar work
10.Be familiar with the processes involved with I.P. litigation

36. 36Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Procedures
(Remember Sarb-Ox)
1. Established policies and
procedures for the treatment of IP
2. Good records maintained
– Internal files (electronic or paper)
– Know the status of the assets
1. Transactions documented
– Records kept
– Ownership, impact on assets tracked
4. Points of contact for intellectual
assets identified

37. 37Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Intellectual Property Procedures
(Remember Sarb-Ox)
5. Financial data relating to
intellectual assets available
6. Violations reported
7. Transactions audited
8. Business units periodically
checked
9. Third party claims tracked
10. Program of enforcement
established

38. 38Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Notebooks & eMails
• Notebook practice
– routinely record & witness data
• Emails and memos
– may be discoverable in litigation
– may be used as admission against interest
– avoid admission of infringement
– avoid disparaging your patents & applications

39. 39Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Notebooks & eMails
• Notebook practice
– routinely record & witness data
• Emails and memos
– may be discoverable in litigation
– may be used as admission against interest
– avoid admission of infringement
– avoid disparaging your patents & applications

40. 40Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Loss of patent rights
• Public disclosure, use, sale or offer for
sale of invention before filing patent
application terminates patent rights in
most countries
• File patent application before
disclosure, use, sale or offer for sale
of invention to avoid loss of patent
rights

41. 41Intellectual Property in Business Transactions / Course 2 / Module 6 © 2005 William N. Hulsey III
Loss of patent rights
• Public disclosure, use, sale or offer for sale
of invention before filing patent application
terminates patent rights in most countries
• File patent application before disclosure,
use, sale or offer for sale of invention to
avoid loss of patent rights