Mosaic ImmunoEngineering Inc (CPMV)

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No. 1 Mistake made by startups - Patent Infringement

http://www.gigalaw.com/articles/2001-all/greenberger-2001-08-all.html

Mistake No. 1 on the Top 10 list is not properly licensing patent rights that are owned by others. This is a growing problem, particularly among Internet-based businesses, as recent developments in the law concerning software and business-methods patents have increased the use of and reliance on patents by many businesses.

Patent infringement is of particular concern to early-stage companies because patents give their owners broad legal protection. A patent can protect its owner's right, not just to a particular device, but to the entire process by which that device operates. By comparison, a copyright protects only a form of expression, but not its underlying concept.

For example, a company that is barred by a copyright from using a certain software program can legally develop or purchase another program that performs exactly the same function without violating the copyright. Likewise, in the case of a domain name that conflicts with an existing trademark, the selection of an alternate name is limited only by imagination.

When a company discovers that one or more existing patents covers an element of its business, properly licensing those rights is crucial. Licensing less than all of the rights that a company needs to operate its business is a frequent error.

Licensing patent rights can be complex. Companies must pay careful attention to the exact nature of the rights they are licensing. Licenses may be exclusive or nonexclusive. They may include a right to sublicense the patent rights or not. They may allocate responsibility for prosecuting those who infringe, and for defending against claims of infringement that may be brought by other patent holders.

Licensees should ensure that their purported licensors actually have the right to license the technology or business methods that they are purporting to license.

The consequences of patent infringement can be severe. A court may enjoin an infringer from using the patented process and, in cases of intentional infringement, may award damages to the patent owner of up to three times its actual losses from the infringing use. Accordingly, infringing on a patent, either out of ignorance or as the consequence of an inadequate licensing agreement, can be expensive and disruptive to the business of an early-stage technology company.