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No longer solely the domain of the legal department, strong intellectual property practices are an integral part of company operations, and require that lawyers understand the fundamentals of business practice and that business executives understand the law. In The Business of Intellectual Property , Chris Arena and Ed Carreras explain the growing importance of intellectual property assets from both legal and business perspectives, and offer strategic advice on how to manage IP assets for competitive advantage, profitability and return on investment.

Focusing on the intersection of law and business, The Business of Intellectual Property combines statutory frameworks, case law, business and legal principles of accounting and valuation, and-most impressively- multiple case studies of successful companies, to give readers the strategic vision and practical advice they need to integrate such processes into their company's operations.

With extensive experience in the legal departments of major corporations (Coca-Cola, BellSouth, AT&T) as well as firm practice at leading IP specialist Woodcock Washburn, Arena and Carreras are uniquely positioned to demystify the complicated intersection of intellectual property and the business operations upon which it is increasingly built.
Reviews

"In The Business of Intellectual Property , Chris Arena and Ed Carreras materially advance our understanding of how firms extract value from innovation and intellectual property. With the use of thoughtful (and often entertaining) case studies, they demonstrate why intellectual property protection should be part of an innovation strategy linked to a strong business plan, and also why a firm's innovation strategy must recognize how particular markets value very differently various types of intellectual property."
--Roger J. Dennis, Dean, Drexel University College of Law

"The book is a fascinating read that turns the spotlight on intellectual property and makes readers eager to learn more. For those who thought intellectual property was boring, I highly recommend The Business of Intellectual Property . Its authors refute that notion with this captivating work"
-Deborah L. Rusin Research Librarian, Latham & Watkins, Chicago

"The authors credentials shine through in The Business of Intellectual Property as they successfully weave together business and legal concepts in a way that provides an accessible resource for business managers seeking to understand the nuances of intellectual property law.

Arena and Carerras successfully elevate the discussion that began in earnest with Rembrandts in the Attic to a level that is applicable to a more mature business climate."
Shane Nichols, partner at King & Spalding
Georgia Bar Journal

"Chris Arena and Ed Carreras have brought together two critical perspectives for practicing attorneys and senior executives: the legal view of intellectual property and the strategic view of delivering customer value. Using an approach that is thorough and nuanced, they have demonstrated how companies can align business and innovation models to extract the most value from ideas."
--Steve Walton, Interim Associate Dean and MBA Program Director, Goizueta Business School, Emory University

"Chris Arena and Ed Carreras have brought together two critical perspectives for practicing attorneys and senior executives: the legal view of intellectual property and the strategic view of delivering customer value. Using an approach that is thorough and nuanced, they have demonstrated how companies can align business and innovation models to extract the most value from ideas."
--Steve Walton, Interim Associate Dean and MBA Program Director, Goizueta Business School, Emory University

A first step in improving your business is to make sure it is well organized. It is surprising how many businesses have been careless about this step. Some such companies may be mildly successful, but they could be even more profitable if they paid attention to the basics of organization.

Questions you may have about this are:

* How do you get started organizing your business?
* What methods can be used?
* What are the ultimate benefits of doing this?

This lesson will introduce the elementary factors in organizing a business. The material applies to both small businesses, as well as to large corporations. There is a mini-quiz near the end of the lesson.
Starting point

Whether you are starting a new company or improving an existing one, it is important to have a business mission, concept, and vision.

You need to define the purpose or mission of your business. Much of this has to do with the motivations of the leadership. Then you must have a business concept, model, or terrific idea of some product or service that will sell. Finally, in order to improve, you must have a vision or goal of where you want to end up.

Details of these factors are explained in the next lesson Mission, Concept and Vision.
Organization methods

Once you have established or re-defined the groundwork for your business, you can use various methods and standards to improve the operation and organization of your business.
ISO 9000 standards

A very good way to organize the way your business operates is by following the ISO 9000 standards. You do not necessarily have to become certified in ISO 9000, but you can still use the standards as a guide in how to effectively operate your business.

(Details are explained in later lessons in: Organize Your Business with ISO 9000.)
Re-engineering

Re-engineering has been a management fad in recent years. Unfortunately, it has been misapplied and used as a way to eliminate workers. A business or company that has been in existence for a while usually has an operation structure in place. It may be necessary to drastically alter that structure and re-organize and become more effective.
Benefits

Organizing is a form of planning. It has been shown that setting a good structure can make any organization more effective and efficient.

Good organization results in reducing losses due to duplicate work or unclear objectives. All personnel do better work, because they know what they should be doing and what their place is in the scheme of things.

A well-run company is in a stronger position in the competitive marketplace. Not only are profits higher, but repeat business is enhanced.
Summary

Setting your mission, core competencies, and vision is a first step to organizing your business for improvement. Following ISO 9000 sets your business in the correct direction. Finally, re-engineering or re-organizing may be necessary to start your business in becoming a champion in its field. The benefits are increased profits and customers.

SBA Business Classifications
SMALL BUSINESS

For the purpose of the program, a business is generally considered small if it is independently owned and operated, is not dominant in its field of operation and can further qualify under the criteria set forth in the Small Business Administration (SBA) Small Business Standards Regulation, Title 13, Part 121 of the Code of Federal Acquisition Regulations (FAR).

Small Disadvantaged Business certified by SBA

Defined as at least 51% owned, controlled and daily operated by one or more socially and economically disadvantaged individuals. All [where there are multiple individual owners, do we mean that each of them must be below this threshold, or that all of the individual owners together must be below this threshold? Same question on Slide 11 of the last attachment.] individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry.

Woman owned Small Business

Defined as at least 51% owned, controlled and daily operated by one or more women.

Veteran Owned Small Business

Defined as at least 51% owned, controlled and daily operated by one or more American Veterans.


Veteran Owned Small Business

Defined as at least 51% owned, controlled and daily operated by one or more American Veterans

Service disabled Veteran Owned Small Business

Defined as at least 51% owned, controlled and daily operated by one or more service disabled American Veterans.

Hubzone Small Business (certified by SBA)

Defined as a small business that must be owned and controlled by one or more US citizens, its principal office must be located within a HUBZone (Historically Underutilized Business Zone) – which includes lands on federally recognized Indian reservations, and at least 35% of its employees must reside in a HUBZone. To determine if a Supplier is located in a HUBZone,.

BUSINESS LEGAL FORMS OF OWNERSHIP

Sole Proprietorship Partnership Corporation & LLC's

In making a choice of how your business will be structured, you will want to take into account the following:

The size and scope of business you hoping to attain
The level of control you wish to have
The level of structure you are willing to deal with
The business's vulnerability to lawsuits
Tax implications of the different ownership structures
Expected profit (or loss) of the business
Whether or not you need to re-invest earnings into the business
Your need for access to cash out of the business for yourself
The 4 basic legal forms of ownership are:

Sole Proprietorship
Partnership
Corporation
Limited Liability Company

CHARACTERISTICS OF EACH LEGAL FORM:

Sole Proprietorship

This is the easiest and least costly way of starting a business. A sole proprietorship can be formed by finding a location and opening the door for business. There are likely to be fees to obtain business name registration, a fictitious name certificate and other necessary licenses. Attorney's fees for starting the business will be less than the other business forms because less preparation of documents is required and the owner has absolute authority over all business decisions.

Partnership

There are several types of partnerships. The two most common types are general and limited partnerships. A general partnership can be formed simply by an oral agreement between two or more persons, but a legal partnership agreement drawn up by an attorney is highly recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. A partnership agreement could be helpful in solving any disputes. However, partners are responsible for the other partner's business actions, as well as their own.

A Partnership Agreement should include the following:

Type of business.

Amount of equity invested by each partner.

Division of profit or loss.

Partners compensation.

Distribution of assets on dissolution.

Duration of partnership.

Provisions for changes or dissolving the partnership.

Dispute settlement clause.

Restrictions of authority and expenditures.

Settlement in case of death or incapacitation.

Corporation

A business may incorporate without an attorney, but legal advice is highly recommended. The corporate structure is usually the most complex and more costly to organize than the other two business formations. Control depends on stock ownership. Persons with the largest stock ownership, not the total number of shareholders, control the corporation. With control of stock shares or 51 percent of stock, a person or group is able to make policy decisions. Control is exercised through regular board of directors' meetings and annual stockholders' meetings. Records must be kept to document decisions made by the board of directors. Small, closely held corporations can operate more informally, but record-keeping cannot be eliminated entirely. Officers of a corporation can be liable to stockholders for improper actions. Liability is generally limited to stock ownership, except where fraud is involved. You may want to incorporate as a "C" or "S" corporation.

If you are unsure which legal form is best for you, contact your local Small Business Administration for assistance with deciding.

I periodically get questions from readers of this blog about business plans. I was pondering the best way to work through a “business plan series” (similar to the Term Sheet series and Letter of Intent series) when Dave Jilk - my partner in Feld Technologies (my first company) - dropped a few documents on my desk, including the original Feld Technologies business plan. A scanner, Adobe Acrobat PDF maker, and a little OCR later, I had the document in electronic format.

While I don’t read business plans anymore (executive summaries are enough for me), I believe the business plan is a critical document for an entrepreneur to organize his thoughts around his new business. In today’s world of excessive PowerPoint presentations, the art of sitting thoughtfully and writing out the plan has – in many cases – been lost. The best way to explain what should be in a business plan is to show one and, as I read through the original Feld Technologies plan, I was pleasantly surprised by the content. In many ways it is simplistic and reflects the relatively naive thinking of a 22 year old working on his first business. However, when I think about how Feld Technologies evolved, the document framed the business very effectively.

If you are looking for sex, violence, insider trading, hackers, and rock and roll, stick with Tom Evslin’s blook hackoff.com. If you want to see a late 1980’s business plan and some of my commentary along the way, enjoy. I’m going to go linearly through the plan – the actual plan text will be in purple so it’s easy to separate the plan text from my comments.