Startups: Incorporation, Funding, Contracts, and Intellectual Property
(TE 450)
(Formerly: Legal Issues In Engineering Entrepreneurship - ENG 450)

This course will explore how legal tools may be used in the construction and successful operation of your company to deliver the next great product to market. Topics covered in the class include: issues with business formation, intellectual property, non-disclosure agreements, contracts, and other corporate legal issues particularly impacting startups.

Fall 2018 Syllabus

Class #	Materials	Class Topic
1	Sole Proprietor Partnership General Partnership Uniform Partnership Act Limited Partnership Limited Liability Partnership Corporation C-Corp Privately-Held Company S-Corp Limited Liability Company (LLC) Piercing the Corporate Veil Choosing a Legal Structure Business Partnerships Are Not Preferred	I.   Basics and Forming a Business             A.   Business Entities                         1. Sole Proprietorship                         2. Partnership                         3. Corporation                         4. LLC   CLASS 1 NOTES
2	Articles of Incorporation Bylaws Illinois Business Startup Guide Illinois Corporate Name Search USPTO Trademark Search Domain Name Registrar (Go Daddy) New Generic Top Level Domains Illinois LLC Guide Illinois LLC Articles of Organization Sample LLC Operating Agreement Illinois Corporation Guide Illinois Corporate Articles of Incorporation Sample Corporate Bylaws Sample General Partnership Agreement Entrepreneur Web Sites More Entrepreneur Websites FEIN Number Application World Business Chicago Chicago Business Education Classes HowToStartAnLLC.org	B.   The practicalities of forming your                corporation             1. Choosing a corporate name             2. How a state corporation registry                          works             3. Bylaws and Operating Agreements                    Examples and Important Clauses   CLASS 2 NOTES
3	Seedhack Founders Agreement Founder's Agreement Myths Vesting Founder's Agreement With Vesting Stock Dilution Co-Founder Development Amazon Profitability Incorporation Presentation Template	C.   Ownership agreements             1. Get it in writing             2. Founders ownership agreements             3. Valuation and dilution – taking                 the long view             4. Restrictions on transfer of stock             5. Negotiation Exercise CLASS 3 NOTES
4	How Funding Works Chart Bootstrap Funding CrowdFunding Kickstarter Actual Startup Pitch Decks Angel Investor Angel List Hyde Park Angels Angel Capital Association Accredited Investor SEC Accredited Investor Bulletin Illinois Angel Investment Credit Startup Growth Rate YCombinator Accelerator Listing Startup Funding Explained SBA Website Venture Capital VC Listing Negotiating with VCs Serra Ventures IllinoisVentures SBA Loans Convertible Debt 1 Convertible Debt 2 Convertible Debt 3 Convertible Debt 4 Gross Income Tax Deduction Stock Option 83(b) Election Corporate Valuation Typical Valuation Multiples Top Cities for Venture Investing	D.   Funding arrangements             1. How startups get money             2. Bootstrap             3. Angel             4. Bank loan             5. SBA             6. Grants             7. VCs             8. Tax implications             9. Stock Options CLASS 4 NOTES Questions Before Exam EXAM #1 - On Class 1-4 materials
5	Contract Restatement of Contracts 1 Restatement of Contracts 2 UCC 1 UCC 2 Jurisdiction Federal Question Jurisdiction Diversity Jurisdiction State Courts US Federal Courts State vs. Federal Court Comparison	II.   Contracts             A.   Introduction to Contracts                         1. What is a Contract                         2. Interpretation and                             Enforcement of Contracts                         3. Get It In Writing CLASS 5 NOTES
6	Review Exam #1 Ultra Vires Corporate Veil Mistake Misrepresentation Fraud Duress Undue Influence Consideration Promissory Estoppel Unclean Hands Negotiation Contract Negotiation Basics Contract Negotiation Strategies Term Sheet BATNA	B.   Contract Formation             1. Offer, Acceptance, and                 Consideration, etc.             2. The negotiation process             3. Practical contract terms and                 enforcement considerations             4. “Reasonably promptly”, “best                 efforts”   CLASS 6 NOTES
7	Statute of Frauds Blue-pencil  Bankruptcy Warranty Implied Warranty Indemnification Clause NDA/Confidentiality Non-Compete Agreement Mass Non-Compete Reform Jimmy John's Non-Compete JJ Non-Compete Illinois AG Article JJ Settlement Illinois Freedom to Work Act Breach of Confidentiality Suit	C.   Specific Contracts and terms             1. Performance             2. Modification of Agreement             3. Damages             4. Warranties             5. Indemnification             6. Non-Disclosure Agreements             7. Non-Competes   CLASS 7 NOTES
8	Term Sheet Sample Term Sheet National Venture Capital Assn. Term Sheet Generator Guidelines for Online Agreements Google Terms of Service Yahoo Terms of Service Snapchat Terms of Service Lease Net Lease Triple Net Lease Sample Office Lease Sample Commercial Lease	D.   Specific Contracts and terms             1. Term Sheets             2. Terms and Conditions on Websites             3. Lease Agreements CLASS 8 NOTES
9	Assignment License Royalties Cross-Licensing Sample Patent Assignment Sample Exclusive License Strategic Alliance Joint Venture Joint Venture - 2 7 Deadly Joint Venture Sins Joint Venture Checklist	E.   Specific Contracts and terms             1. IP Assignments             2. Joint Venture Agreements   CLASS 9 NOTES Questions Before Exam EXAM #2 – On Class 5-9 materials
10	Intellectual Property Ancient Brian Surgery Dentistry 4,000-7,000 years old Hero of Alexandria Roman inventions Ancient Islamic civilization inventions Letters Patent Patent Copyright Trademark Trade Secret	III.   Intellectual Property (IP)             A.   Into to IP                         1. Patents                         2. Copyrights                         3. Trademarks                         4. Trade Secrets  CLASS 10 NOTES  Lightspeed Presentation
11	Review Exam #2 Patent and Trademark Office (PTO) Patent Application Patenting Process US Pat. No. 7,753,421 US Pat. No. 7,017,598 US Pat. App. Pub No. US 2004/0221883 US Pat. No. 5,871,783 US Pat. No. 6,210,728 Statutory Subject Matter Bilski Alice v. CLS Barich Bilski Paper Novelty Non-Obviousness Patent Do's and D'oh! Sufficiency Of Disclosure	A.   Patents             1. The Patenting Process             2. Review of Sample Patents             3. Recognizing Patentable Subject                 Matter             4. Novelty             5. Non-Obviousness             6. 35 U.S.C. Sec. 112   CLASS 11 NOTES
12	Patent Claim Novelty vs. Non-Infringement America Invents Act (AIA) Text of AIA IPO AIA Comparison Chart Design Patent Apple v. Samsung D595,574 D599,372 D604,305 D618,677 D593,087	A.   Patents                        7. Claim Types             8. Novelty vs. Infringement Analysis                9. Design Patents           10. Startup Patent Issues CLASS 12 NOTES
13	Trademark Unregistered Trademark Service Mark Lanham Act USC TM Laws Trademark Fair Use Genericized Trademark PTO Tess Trademarking Pizza Taste Trademark Classes	B.   Trademarks             1. What can be trademarked             2. TM v. ®             3. The Trademark Process             4. Using Trademarks as Business                 Tools CLASS 13 NOTES
14		IV.   Additional Topics             A. Practical Advice For Startups CLASS 14 NOTES Questions Before Exam EXAM #3 – On Class 10-13 materials

Student Comment Excerpts

• Thanks for the awesome class. I learnt a lot from it. Although I’m not currently planning on starting a company, it helps broaden my legal knowledge and hopefully lets me realize when I need to “call the plumber”.
• I wanted to reach out and thank you for a great time this semester. Out of all of my classes, I can say with great certainty that it was the one I looked forward to the most each week! I can definitely say that my eyes were opened to some of the many applications (and potential horrors!) that law has to offer. Whenever I hear friends discussing that they'll "just get a patent," I am now able to inform them that it's not so simple!! 

What are the major strengths and weaknesses of the Instructor?

• He is very knowledgeable and patient in answering questions.  Plus he is humorous.
• Prof. Barich is very practical and experienced.  We all love him.
• Open to answering questions.  Gave relating examples for difficult subject matter.
• The instructor was very engaging and kept the 2.5 hour class extremely interesting.
• Reasonable instructor, very excited and knowledgeable about the material, entertaining lectures, extra resources were interesting and helpful
• Very nice and friendly.  Excellent presenter/lecturer
• Interesting examples, passionate about subject, involves students
• One of the most engaging instructors I have had, always humorous, clear, and thorough in explaining topics.  Makes the material easier to understand. 

What aspects of this course were most beneficial to you?

• Understanding a different world outside engineering.
  
• The actual experience of Prof Barich as a patent lawyer and practiced in the field for many years
• Emphasis on the concepts and understanding, clear objectives, clear expectations
• Patents, contracts

Comment on the grading procedures and exams

• The grading was the most fair I've ever seen.  Everything on the tests were covered in class.
• Very fair
• Thank you for listening and throwing out confusing questions