Gunnar Gundersen - How to Manage Your Intellectual Property (C0318)

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To match with a licensed therapist today, go to Talkspace.com and enter promo code. Hi everyone, it's Bill Black, the exit coach from the Exit Coach Radio show. You know, one of the biggest questions I get on the show is what exactly goes into a business exit plan and when should I start creating mine? Well, I always tell people that the best time to start was 5 years ago, but the next best time is now because you never know when you might need it. So we put together a free report that describes what an exit plan is and what you should know. You can get it free by texting exit plan with no spaces to 44222. That's exit plan to 44222. Again, text exit plan to 44222. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for. Their best tips, strategies, and precautions so you can be well planned. And don't miss our one minute exit coach tip of the day on exitcoachradio.com. And now here's your host, the exit coach Bill Black. Hey everybody, thanks so much for joining us today. It's a pleasure to have you with us. We have a beautiful day here in Southern California. Hope you're enjoying your day wherever you are, staying warm if you're in the Midwest or backeast. My next guest is an attorney with a local law firm called Kahana Law, and they specialize in a very interesting area of the law, intellectual property protection, consulting, and litigation. And we're going to talk about how to manage intellectual property to maximize your business's value. I'd like to welcome to the show Gunner Gunderson. Gunner, thanks so much for joining us and welcome to the show. Thanks Bill um glad to be on it. Do I have the pronunciation of your name perfect Gunner Gunderson. That's that works. It it works. What is it really? Oh, I don't know what it is really, right? It's got lost somewhere on a on a boat from Norway. Gunnar Gunderson is what people call me. It's a great name. It's a great name. I got to say I love it. So we've talked a little bit in the past, Gunner, about what you do with Kahana law and the business of intellectual property protection. A lot of people don't realize that they have intellectual property in their business. They haven't done much to Um, to protect it or to isolate it or to create a protection and that type of a thing. So tell us a little bit about you and your background and then we'll get into the topic of intellectual property. Sure that sounds great though, uh, so I'm uh I'm originally from Oregon and um. I've been married for 12 years and I have 3 kids, and I came down here to Southern California for school, got my engineering degree from USC. And then I went to law school at Pepperdine where I graduated valedictorian. And then, uh, I took a year to clerk for Judge O Scanlon on the US Court of Appeals for the 9th Circuit, uh, in Oregon, so I got to go home for a year, which was nice. And then I came back to California and cut my teeth at a couple of law firms, Kirkland and Ellis, Irela Mina, and Latham and Watkins. And uh at those places I worked on. Several different types of intellectual property matters, uh, a lot of, uh, patent work. Um, I worked on, uh, the largest patent portfolio acquisition. It was worth $4.5 billion. Um, And I've worked on everything from in my career from helping shepherd trademark filings to um. Uh, drafting and filing amicus brief for the US Supreme Court. I've, um, Dealt with everything from startups to established companies with billions in revenue. I've helped artists and creators, and um I've worked in all kinds of industries from oil and gas to speech recognition and everything you can imagine in between. Uh, most of that is focused on, uh, litigation, arbitration, consulting, um, some transaction negotiation. And um I really just tried to focus on how my legal advice can really further the client's business goals. I think um sometimes uh some lawyers get too focused on the uh on the, on the law, which is fun, uh, from the lawyer's perspective, uh, but I know from a lot of the client's perspectives, it's something that uh. Gets in the way of achieving the goal. So they clients want to know how is this gonna help me achieve my business goal. And uh that's really something I've been trying to focus on. And uh now I'm uh I'm a partner and IP practice chair at Kahana Law, um, where I'm focusing exactly on that, um. I'm helping so let's talk, let's talk about from initially I'm a, I'm a person that wants to start a business. I have an idea. I think it's unique and and I don't know whether I should see if the idea flies first and then get some kind of trademark or copyright protection or whatever or whatever you tell me I need or whether I should come talk about it first with someone. What's your advice to someone in that situation? Sure, um, well, it's kind of like I, I, I was, I was listening, um, you know, to the, to the, to the radio promos you had before the interview here, and, uh, I kind of like, I like what you said about uh you needed to start your exit plan 5 years ago and uh it ends up being that way a lot of the time for a lot of the folks I, you know, end up interacting with, um, that. end up getting in a bigger mess than they needed to be in if they had just started getting some intellectual property advice from the beginning. Um, so I recommend talking to somebody as soon as possible, as soon as you think that you have something that is intellectual property, because, um, it may not be that you need to do a lot of work right up front, but what you do need is someone to help you develop a strategy about how you're going to, uh, protect and grow that intellectual property asset. Uh, it's especially important for I think a lot of your listeners who eventually want to have a strong exit. They want to have a strong intellectual property portfolio that they can show, uh, an investor or buyer. That is going to believe that whatever uh IP you have, you can really uh assert and protect. Now what's, so yeah, I was going to mention that. So a lot of our listeners are in that mode where they're saying, well, I'm getting my business ready for sale and you know I've never really thought about my intellectual property. What is, what are some of the things that That you tell people, you know, did you realize that this is intellectual property? Maybe it's not a patent for, you know, a medicine or something like that, but maybe it's a way, it's a process that they've put together or some kind of unique way they put those things together. Are those types of things, processes, and things like that considered intellectual property? What, what's the breadth of intellectual property? Sure, um, well, I, I like to think about as a, as a couple of different buckets that you can, that you can think of as intellectual property. Um, there are patents, there's trademarks and trade dress, and copyrights and trade secrets. And uh to a lesser extent depending on, on where you fall on the. On, on the ideology of it is, uh, is whether or not, uh, Publicity rights or intellectual property that most people don't have to, to deal with that issue. So, um, you know, patents don't have to be, there's a lot of, uh, a lot of, uh, attention has been brought to the what they call the smartphone wars, a lot of technology in this, in, in high tech, um, phones that has led to a lot of high profile uh cases just like the recent uh Apple Samsung Supreme Court case that just came down recently. But, uh, patents, patents don't have to be, uh, high tech, they just have to be, uh, something that's, uh, a new, something that's novel, a new invention. And so, so there might be things that people can patent that they don't necessarily think of as an invention. The other thing people don't know about patents is that there's a separate type of patent called the design patent. We can get uh uh patents on the unique designs of their products. And in fact, even though there's a lot of technology in the smartphones, the most recent Supreme Court case, uh with Apple and Samsung was all about the design patents, the design of, um, you know, the aesthetic design of the phones. Uh, so there could be that, uh, you get protection that way. Um, a big one that people don't, um, maybe realize is their trade secrets, potential trade secrets that they might have, uh, which can include it just information. So it could include just the hard work you've done to put together a great client list, um, how you figure out, uh, your pricing. And um the key there is that you need, you need particular uh policies in place at your business so you can show a court that you really did keep these things secret so that you can protect them as trade secrets. That's interesting. So, so how do they go about protecting those types of things, um, with the, I mean, what's the process? Is it, is it put it into some kind of an explanatory form and then bring it to you? I mean, how do, how do you go through the process of taking an idea to get it uh patented or copyrighted or trademarked? Sure, well, um, what I, what I do a lot of is, uh, on the consulting side, uh, for, for the patents, I have, um, lots of colleagues I work with that are patent agents, so they, um, they could be attorneys, but they don't have to be attorneys, but they're registered to practice for the USPTO. And so what I'll do is I'll work with the client and uh figure out if um they're in a situation where they're developing um ideas and products and innovation that, that is patentable, and I'll put them in touch with um patent agents that I trust to help them develop the actual patents and then I'll work with them to actually implement uh. Management strategy where they have the right um policies and procedures in place at their at their company and the right agreements in place with um manufacturers and, and um. And employees to make sure that they are capturing most of that value that they're probably doing most of the investing in. Uh, to, to create an interesting thing about, uh, especially on, on the patent side, so this is an interesting, um, dynamic, um, in copyrights for your employees, most of the time, general rule is there's already some statutory support that creates a presumption that the employer owns, uh, copyright copyrighted material that gets created in the course of the scope of your employment. But for patents, it's the inventor. The inventor owns the patent. So unless there are the right kind of agreements in place, um, you can end up with a very difficult situation as a, as a company where you've invested a lot in, in developing products and innovation and you don't own it if you didn't um. If you didn't do your homework, you didn't do it right. That's not good. That's not good. That's not good. And another big thing that happens and another big thing that happens both here and abroad, especially, um, um, a lot of, a lot of what happens now is, uh, companies will outsource their manufacturing, um, so they'll they'll design or develop a product in house, but then the day they'll have someone else make it and, uh, you know what I've seen happen. Um, is that they won't dot their I's and cross their T's on, on the ownership of this, uh, Type of stuff they won't get their patents filed or develop uh. Good strong agreements with uh the manufacturers to make it clear who owns what. And what happens a lot of times, the manufacturer um will file patents uh on the, the products that, that, that you developed, and then kind of try to lock you into the, into the relationship by telling you, well, if, if you, if you leave me, and you try to make this someplace else, I'll, I'll assert my patents against you. And maybe at the end of the day you could prove that those those patents aren't valid because they didn't really invent those things you're going to, it's it's, it's a battle, right? It's a, you got a needless expense now to engage in some patent litigation with your manufacturer because you didn't set the rules of the relationship strong enough. Jon, is it true that a lot of companies might think that the just having a nondisclosure agreement with as they're outsourcing. Manufacturing would be enough, uh, and, and they find out otherwise, is that what you're getting at there? Yeah, that, that happens a lot. I've seen, I've seen, um, you know, I've I've had, I've had clients come to me and um. And they feel like very very confident that they, they have these non-disclosure agreements. We've agreed that the, these, these uh Disclosures that we're making to you are confidential, they belong to us, they know very vague terms, and those things usually aren't solid enough to really protect your intellectual property ownership. Um, and so, um, a standard NDA is probably not gonna get it done for you. I, I'd be, I, I'd tell folks to be mindful of that. Yeah, especially if you're trying to do. Well, especially if they're in a foreign country and it could be very tricky to try to navigate that type of a litigation, I would imagine if, um, if you haven't set it up properly. Is, is, for instance, in that kind of a situation, the when you do a, a, uh, patent or trademark or something along those lines, does that bring the fight back to the US, for instance, I can imagine somebody getting into a problem, say they're manufacturing in China. And somebody starts competing against them with their trade secrets, and now they, they don't have it set up properly and trying to track down and litigate overseas must be a real quagmire. Yeah, well, that's, that's one of the challenging things about certain types of uh intellectual property bill. Um, the patents and trademarks are very territorial and so it's important that uh you work with somebody, especially if you're outsourcing your manufacturing abroad, who has um connections and relationships with, um, folks overseas because your US patent. Isn't going to do anything for you in China. Uh, Chinese, a Chinese patent, uh, same with trademarks. Um it's all very territorial. And on the in the But and a big problem too is that those, those groups, those manufacturers might even get US patents and then block you out of your own market. Um. So It's important that you have a, uh, if you're if you're going to do uh overseas outsourcing of your manufacturing that you, you use from the beginning, uh, work with somebody who can help you craft a global strategy. Uh, which is why I try to maintain and I have, uh, relationships with, with intellectual property attorneys, uh, in Europe and Asia. So it sounds like the tip is to step back, work with somebody who knows what they're doing, and look at the big picture and don't skimp on this area of your planning. And then of course there's the other side of it too. What if you're buying a business and they say, well, we have this intellectual property that we want you to pay X dollars for? How do you know that that intellectual property? I been filed properly and it's protected and it's not uh there's not potential litigation. Do you do you do a lot of work in that area where you're helping buyers look at um what they're done that buyers who are who are who are looking to help someone else, you know, someone else's exit or their um. They're looking to license someone else's um intellectual property and resell their be a reseller. And that's something that I would highly recommend is getting someone to kick the tires, so to speak, and it could be done very quickly by somebody with a lot of experience doing that. Um, you know, there's, there's all kinds of, of horror stories out there where, um, folks have even tried uh to sell or, or license, um. IPE that has been declared invalid by court, but they haven't, uh, you know, they don't disclose that. That's something for, that's very easy for, um, a lawyer, uh, with the right background to uh discern that quickly. And that's the one of the things that uh I've, it's been my experience is that Um, the clients that you interact with who skins at the beginning, uh, usually end up with a very much more expensive problem down the road than the ones that took a step back and realized that protecting the intellectual property around their product or service that they're developing isn't a nice add-on. It's not the frosting on the cake, but it's part of the value of the business. And that's, that's a key thing for people to understand that while they're focused on, on, on running the business day to day, creating the value and the in, in, in ways that are very easy to understand, um, you know, the revenue stream and all that at the end of the day. If, if the brand they're building up can be basically taken out from under them and all, all that hard work. and end up going down the drain, um, because they didn't take the time to just, um, you know, uh, engage with the inexperienced, uh. Intellectual property attorney to to develop a game plan to, to really, you know, protect a lot of the core of the value of their company they're building up, you know, the, the trademark, the goodwill, the brand. I mean, the, the last guest you had I thought was really good talking about the values and how to communicate those values to your customers. But at the end of the day, that's kind of wrap, that's wrapped up in the brands you're creating, right? When people see your brand, they want to associate with those values. You don't have the right trademark or trade dress strategy in place. To protect that brand, then it's, it's gonna be very easy for someone to come and destroy all that relationship building um that you, that you've developed with your clients. Yeah, it's a hugely important area. Hey, I've got one last question for you, Gunner, and that is I heard that in the, I think it was the 1930s or the 1940s they were, they were seriously contemplating closing the patent office because they thought everything that could be created had been created. Did you ever hear that in your studies? I haven't heard that story, but I guess they were. They were they were wrong. I guess they were on it. It's a hugely, hey listeners, seriously, it is a hugely complex area and whether you're getting ready to exit your business or whether you're just starting up your business or maybe you're buying a business, there's going to be some intellectual property involved in that transaction or there should be. You may need to look at how to restructure that. And so I want to implore upon you to get in touch with an intellectual property expert, and that is Gunner Gunderson at Kahana Law. And the best way to get in touch with him is to email them at gunner Gunn at Kahana K A H A N A law.com or via his phone, which is area code 310. 403-3698 or go to his LinkedIn account. You could probably put in Gunner, G U N N A R Gunderson as it sounds, except with an E at the end, Gunderson Gunderson and and look him up there. He posts regularly to that site. And also I would imagine that at Kahanala.com there's probably a lot of great information they could find, huh, Gunner? Oh yeah, oh yeah. Yeah, it, you know, it's an interesting area of the law, and it's, it's something that's not to be taken lightly as you plan your business structure. So Gunnar, I want to thank you so much for coming on and clarifying so many issues about intellectual property, and I hope we'll have a chance to talk again in the near future about some of maybe the particular issues out there that people should be concerned with. That sounds great, Bill. It was a great talk. Great pleasure having you on. Thanks so much. We're going to take a short break and we'll be right back after this, so please stay with us. Listening to one of many shows on Exitoachradio.com. We're interviewing advisors, authors, and thought leaders for their best tips, ideas, and precautions so you can be well planned. If you'd like to be a guest on any of our shows, go to guest.exitcoachradio.com. Exitcoachradio.com. Come listen for a minute. You're listening to Exit Coachradio.com, the information station for age 50 plus business owners, where we're interviewing top advisors for their best tips, ideas, and precautions so you can be well planned. We upload new one minute tips every day. Exitcoachradio.com. Come listen for a minute. Hey friend, I know how it feels, waking up exhausted after multiple trips to the bathroom and feeling embarrassed by sudden leaks. I used to be constantly on edge, searching for a restroom whenever I was out. Then I discovered better woman. 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