Intellectual Property Issues for Startups Participating in Entrepreneurship Support Programs in Wisconsin

By Hammons, Nathaniel S. | Marquette Intellectual Property Law Review, Winter 2018 | Go to article overview

Intellectual Property Issues for Startups Participating in Entrepreneurship Support Programs in Wisconsin


Hammons, Nathaniel S., Marquette Intellectual Property Law Review


INTRODUCTION  I. ENTREPRENEURSHIP SUPPORT PROGRAM IN WISCONSIN     A. Accelerators     B. Incubators and Co-Working Spaces     C. Hackathons     D. Business Contests     E. Startup Social Groups     F. Startup Service Organizations II. OVERVIEW OF INTELLECTUAL PROPERTY     A. Copyright        1. Overview of Copyright        2. Copyright Ownership and Transfer        3. Copyright Risks for Startups Participating           in Support Programs        4. Startup Practices for Copyright Protection     B. Trademarks        1. Overview of Trademarks        2. Trademark Risks and Solutions     C. Trade Secrets        1. Overview        2. Trade Secret Issues Arising with Support Programs           a. Creation of Information for a Startup           b. Disclosure of Information by a Startup           c. Efforts to Maintain Secrecy     D. Patents        1. Overview of Patents        2. Patent Ownership and Assignment        3. Issues with Patents and Entrepreneurship Support           Programs III. FOSTERING OF INTELLECTUAL PROPERTY OWNERSHIP BY      WISCONSIN ENTREPRENEURSHIP SUPPORT PROGRAMS CONCLUSION 

INTRODUCTION

Wisconsin is not known as a bastion of startup activity. (1) Yet the startup scene has changed significantly since the turn of the century, and the pace of change has been accelerating. In 2001, only eight early-stage Wisconsin companies raised capital, totaling less than $53 million. (2) In 2016, by way of comparison, 137 early-stage Wisconsin companies raised more than $276 million in investment capital. (3) As someone familiar with the state might surmise, more than half of the deals closed in 2016 were in the Madison area, (4) home to the University of Wisconsin-Madison and large employers in information technology, healthcare, and life sciences, among other sectors. (5) Despite ranking 82nd in the United States by population, (6) Madison has garnered national attention for its startup activity, with one recent study ranking the city sixteenth in a list of "Next in Tech" cities. (7)

Startup activity is not confined to the Madison area, with early-stage investor networks and funds active in Milwaukee, the Chippewa Valley, La Crosse, the Fox River Valley, and elsewhere in the state. (8) Milwaukee, the largest city in the state, is known to have less startup activity than Madison. Yet a 2017 article in Inc. Magazine designated Milwaukee as one of three cities in the country to which startups should consider moving, in part due to the city's affordable rent and proximity to large companies such as Rockwell Automation, GE Healthcare, and Johnson Controls. (9)

Startups are not created, and do not grow, in a vacuum. Indeed, a strong startup ecosystem--i.e., a region's entrepreneurs, investors, mentors, service providers, support organizations, etc., and the connections between the various players--encourages and facilitates the growth of new ventures. (10) Wisconsin's ecosystem has strengthened and deepened, particularly with respect to the creation and expansion of programs that support entrepreneurship and startups. (11) Wisconsin is now home to accelerators, incubators, hackathons, business contests, co-working spaces, startup social groups, and startup service organizations (12)--many of which came into existence within the last ten years. Among other things, these programs help entrepreneurs test and hone business ideas; meet potential co-founders and business partners; receive cash awards, seed investments, and in-kind support (e.g., legal and accounting services); connect with advisors and investors; and receive third-party validation, which can enhance a startup's reputation. (13) Consequently, acceptance into a support program, especially one that is selective, is often a significant moment in the life of a startup. (14)

Participation in entrepreneurship support programs, however, is not without risk. This Article examines the risks that participation may create with respect to a startup's intellectual property, something of critical importance to the long-term success of any modern business venture. …

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