By Art Gillis

Haynes and Boone, a prominent Dallas law firm, invites me to their free knowledge-transfer presentations. I don’t go to all of them, but this time, when I saw the subject, Intellectual Property Rights (IPR), I signed up.

What an enriching experience it was. I’ll begin with the start time - 7 a.m. I was back at my office by 9:15 and didn’t skip a beat in my day’s work. There were 83 other folks there. Forgive me, but I’m the quintessential numbers guy. I counted them.

With absolute precision, the man in charge kicked it off. A panel of six experts (three lawyers, two venture capital specialists and Nortel Networks’ in-house counsel) told me so many things I needed to know, that I wanted to leave a donation when it was all over. Instead, I sent another check to the Dallas Children’s Advocacy Center so my conscience wouldn’t bother me.

If you’re an expert on IPR, you won’t need what this rookie learned. But if you’re in my camp, read on. Rather than my trying to tell you what six experts said, I’ll tell you what an informed audience asked the panel. There were nine questions, but more followed after the bell:

1. Where does Business Process fit into IP?
Answer: It is recognized as patentable, as well as “copyrightable,” so know that patents do not just apply to a physical product. Technology is defined in the broadest sense: anything that is new.

2. Banks are beginning to collateralize IP in making loans to the owner. Is it real?
Answer: Don’t count on it from banks. In the past three years, lenders have entered into this space, but only after the VC investors took the greatest risk. And lenders are not your traditional banks. They are individuals.

3. How does one defend a patent, or fight a patent infringement?
Answer: Any startup should get a patent from Day One, even though it’s not easy and it is costly. Keep in mind that future investors do not want to pay for litigation, so do the legal work up front even though it hurts.

4. Europe has a “fast track process” for getting a patent. Does it work?
Answer: Yes, and it’s a good idea for any owner of an invention who needs to start using it immediately to get his business going.

5. What obstacles will one face in a global economy where laws vary from country to country?
Answer: Be patient, cross-country laws for worldwide protection are becoming more common.

6. How does one get a greater return on his product through the patent process?
Answer: By licensing his invention to partners and achieving business value, not just money.

7. How do I protect myself against a lender who calls the loan and takes my IP?
Answer: Most lenders don’t want the product because they wouldn’t know what to do with it. But the wording of the patent process should protect the owner. The tough answer is don’t breach the loan agreement.

8. Should we worry about China’s laws as we enter into the growth dynamics of their business environment?
Answer: China’s laws look like those of the U.S. But enforcement is different. Laughter in the audience suggested another answer - You’re damn right you should worry.

9. What value does an IP portfolio have?
Answer: Even if you don’t build the products and you license the products, it’s still a good thing to do. The patent process is expensive, but it can be worth it if you know that your business strategy depends on your invention.

What I learned from this investment of 120 minutes: I always thought one had to be a Thomas Edison or engineer to own a patent. I’m neither, but that day I found out I have three patentable products that I use in my consulting practice. A patent costs about $35k, so now I have to figure out if there is a business value for my inventions. With more consultants entering the business worldwide, there should be a market, but I’m not including my inventions on my corporate balance sheet just yet. And it doesn’t help to know that in 1971 the creator of the “Swoosh” was paid 70 bucks for what Nike made billions with.

IPR is something every owner of a new creation should be tuned into, but in my opinion, the right of ownership is like anything else in life. Now that you’ve got it, what are you going to do with it?

Disclaimer - I am not a lawyer, nor do I try to act like one. And I have never told a lawyer joke in my life probably because the 22 law firms I have worked for, as an expert witness in my specialty, have been so impressive that I wouldn’t make a risky move these days without the involvement of a lawyer. In case you’re looking for a hidden endorsement in this blog, I can assure you I have never met, face-to-face, an attorney from Haynes and Boone.

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