Startups: Incorporation, Funding, Contracts, and Intellectual Property
(TE 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 2023 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 Entrepreneurship Resources at U of I	I.   Basics and Forming a Business             A.   Business Entities                         1. Sole Proprietorship                         2. Partnership                         3. Corporation                         4. LLC   CLASS 1 LECTURE NOTES IN COURSEPACK
2	Articles of Incorporation Bylaws Illinois Business Startup Guide ​How to Start a Business in Illinois 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	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 LECTURE NOTES IN COURSEPACK
3	Seedhack Founders Agreement Founder's Agreement Myths Vesting Why Founding Equity Should Not Be Divided Equally Founder's Agreement With Vesting -1 Founder's Agreement With Vesting -2 Stock Dilution Co-Founder Development 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 LECTURE NOTES IN COURSEPACK
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 YCombinator Safe Financing Documents Lightspeed 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 Funders Club 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 LECTURE NOTES IN COURSEPACK Questions Before Exam
5	Contract Restatement of Contracts 1 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 LECTURE NOTES IN COURSEPACK EXAM #1 - Focus On Class 1-4 Materials
6	Ultra Vires Corporate Veil Mistake Misrepresentation Fraud Duress Undue Influence Consideration Promissory Estoppel Unclean Hands Negotiation Contract Negotiation Strategies Term Sheet BATNA Missing Comma Costs $5MM ​Thumbs-up Emoji is Contract Acceptance	Review Exam 1 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 LECTURE NOTES IN COURSEPACK
7	Statute of Frauds Blue-pencil  Bankruptcy Warranty Implied Warranty Indemnification Clause	C.   Specific Contracts and terms             1. Performance             2. Modification of Agreement             3. Damages             4. Warranties             5. Indemnification   CLASS 7 LECTURE NOTES IN COURSEPACK
8	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 Term Sheet Sample Term Sheet National Venture Capital Assn. Term Sheet Generator	D.   Specific Contracts and terms             1. Non-Disclosure Agreements             2. Non-Competes             3. Term Sheets CLASS 8 LECTURE NOTES IN COURSEPACK
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 LECTURE NOTES IN COURSEPACK Questions Before Exam
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 LECTURE NOTES IN COURSEPACK EXAM #2 - Focus On Class 5-9 Materials
11	Patent and Trademark Office (PTO) USPTO Startup Resources 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	Review Exam #2 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 LECTURE NOTES IN COURSEPACK
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      CLASS 12 LECTURE NOTES IN COURSEPACK
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             4. Practical Trademark Training                 For Startups CLASS 13 LECTURE NOTES IN COURSEPACK
14	5 Things That Can Sabotage a Startup	IV.   Practical Suggestions      1. Startup Patent Issues      1. Practical Startup Suggestions Questions Before Exam 3 Course Evaluations CLASS 14 LECTURE NOTES IN COURSEPACK
		EXAM #3 - Focus 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
  

Spring 2021 Student Comments

• Very good at teaching large amounts of information, overall very good teacher.
  
• Speaks from real life experience. Not just theoretical, but gives lots of practical tips! Best TE class I have taken, and I have taken about 10 of them (I'm in ILEE).