Intellectual Property Laws from the Perspective of Start-up Businesses in America

This paper seeks to examine and analyze the current trends and status of intellectual property laws in the United States, and serve as a reference practice guide for Korean entrepreneurs looking to enter the American market as start-ups. The concerns regarding budget, which plague almost every start-up company, necessarily become even more nuanced for foreign entrepreneurs, as they must navigate the administrative and legal nooks and crannies that differ for them. This paper limits its scope to the management, and strategizing of intellectual properties portfolios, and not the vast administrative and tax concerns associated with foreigners’ founding of companies in the United States. The Leahy-Smith America Invents Act (AIA) enacted on September 16, 2011 is a major reform of substantive patent law in America, ushering in the era of "first-to-file" system, which rewards early filing as compared to the previous "first-to-invent" system. This shift, together with new prior art disclosure rules, makes seeking patent protection particularly more burdensome for start-ups and independent inventors with budgetary limitations. While the AIA provides for affordable prosecution options in limted circumstances via provisional applications and micro entity certifications, entrepreneurs seeking protections for novel ideas and inventions may sometimes be better served by strategical uses of trade secret protection as an alternative, or a complementary solution to patent protection. In actively utilizing trade secret to protect intellectual property assets, entrepreneurs must be mindful of the newly enacted Defend Trade Secrets Act (DTSA) of 2016, and the variety of legal tools it provides the plaintiff including access to federal courts, and damages for monetary loss or unjust enrichment. Even with these enhanced set of tools, however, entrepreneurs must carefully weigh the costs and benefits of patent protection against those of trade secret protection, since the potential recovery for a successful patent litigant in America is often significantly higher than in Korea. Lastly, due diligence in preparation for trademark registrations in potential markets may be worth the up front cost even for budget-conscious start-up companies, considering the potential financial risks associated with weak, or even worse, infringing marks.