Session 3, Part 1: Legal Issues

All right, Joe Hza here back again for tonight legal issues. And a couple things uh I want to make clear at the beginning. This is for background information only. Uh and it's not legal advice even though it says legal issues. And the reason for that there are at least two reasons. One is uh legal things are very fact dependent and so you could have similar facts that have different legal results. Um and I don't want you to you know apply a certain fact and assume you know what you're doing on that. The second is laws change, regulations change. We're seeing that right now in Washington with the new U administration coming in. So things I say here tonight may not apply a year from now or five years from now. What I would like you to do though, and what I my goal here is to uh tell you some of the things you need to watch out for. Not to make you, you know, a do-it-yourself lawyer, but to say um, you know, if I see this thing, I might want to be careful. or consult with somebody rather than go stumbling along and you know end up in a big uh pothole. So that's the goal. Excuse me. Um the other thing is uh I'm going to violate almost every rule of giving presentations. I'm going to give you probably overload you with information tonight. And the reason is I figure I have one shot at telling you about this stuff. And the slides and the video are things you could go back to if you have an issue. Uh last night on our founders panel, it was interesting to know that Peter Goldart said uh in talking about licensing that he had looked at my licensing materials and it was helpful. Well, you know, that was pro he must have taken the course five years ago or something. So, I'll have some of those materials tonight. Um so, anyway, that's the agenda and let's see if we can get going here. I'm going to approach this through the life cycle of a new venture. Okay. On the top going from left to right, we're going from the very beginning, you have an idea and then proceeding to uh pre- outside financing and then first and second round financings etc. Those are the stages of your venture. and down the left side the topics that I'm going to cover intellectual property um legal entity people related issues and some financing things. Um and so even if I don't get through all of it I'll get you through at least some of the beginning phases of it. We start off with the first two phases which is I've got an idea and then maybe I'm getting ready for outside financing and we'll start with intellectual property and in the next few slides we're going to talk about you know who owns stuff and u how do you protect it? Okay, you with me so far? Okay, here we go. Um well why worry about intellectual property? You know, if you, this slide shows that back in 2015, 84% of the value, the market cap of the S&P 500 were represented by intangibles. Tangibles are things like, you know, plant, equipment. And if you think historically, if we go back to pre-industrial revolution, wealth or value was pretty much ownership of land uh or maybe shipping to bring things from one, you know, thing of land to another. Then we hit the industrial revolution and wealth starts to get defined by plant and equipment and capital raised to be able to do that. Now we're in a situation where a lot of what goes on is the intangible assets that a company has. Now those include a bunch of things. It includes the people. It includes processes and ideas etc. Some portion of that intangible is intellectual capital that is things like ideas and processes. uh and some portion of that is intellectual property. That is some intellectual capital that can be protected and worked with. And so depending on the industry you're in, the amount of property you have versus capital may vary. But that's why this is an important set of stuff that you should know about. All right, we're going to talk about types of IP protection starting at the top which is none. that

is you have some ideas and you just make them available to everybody. You don't do anything to protect them. Uh to trade secret which by definition you have a secret um and other people don't know it and so that can prevent others from doing what you're doing because they don't really know what you're doing. Right? Does it make sense? The next two categories, trademark, and I'm going to go in more detail in the future slides. Trademarks are u symbols or words or stuff that you know express a brand of a company. Um and uh copyright, which is a protection of copying of um something you write or produce. Now these this says these enhance values, but they don't really block others. So CocaCola Coke has a trademark that doesn't prevent Pepsi from offering a similar product. They just can't do it under the name Coke. Copyright, as you'll see, protects the expression of an idea, not the idea itself. So uh it does provide value to you, but it doesn't prevent others from using your expression of an idea. Patent on the other hand cuts both ways. You have real rights, as you'll see in a patent, to prevent others from doing things. But in order to get a patent, you have to explain what it is you're patenting, your idea. And you're given a limited time monopoly where you can control who uses that idea. But by disclosing the idea, other people learn from it. And you know, we don't like um we don't like monopolies. We have antitrust laws, etc. But the concept of a patent goes back to the constitution. And the societal tradeoff is we'll give inventors a limited time monopoly in exchange for them explaining their invention. And that way we sort of build on stuff over time. And it's viewed to be a good societal trade-off. There can be combinations of protections. For example, software uh can be protected using copyright and patent type stuff. So those are the types. The duration of how long these last, you know, trade secret could go on forever as long as you keep it secret. At the other end, patents in the US have a life of 20 years from the date of filing. So limited time monopoly versus long-term. the cost goes in the other direction. That is in general patents are the most expensive thing to get and uh maintain. Uh trade secrets can be expensive if you know have to protect plants and things like that but in general much less expensive. So that's sort of a overview of the types of IP and now I'm going to sort of dig into the individuals in a little more detail. So if we go to a trade secret by definition is it's a secret that gives you an advantage in the marketplace. I mentioned the formula for Coke. Uh the protection grants is granted state by state. Um each state has trade secret laws. And of course the secret lasts as long as you keep it secret. So, if you're going to disclose something to somebody and in and it the real secret, uh, you might use a non-disclosure agreement where people agree that, you know, you're going to get this for a specific purpose for a certain time for your venture plan or your pitch, keep all of that secret out of it. You know, people don't, you know, they want to know in Bob uh Jones's parliament, you know, what is it that you have that's valuable and why is it valuable? They don't have to explain exactly how it's done. If people really want to know it, you go into a um a non-disclosure agreement. Um okay. Trademark or service marks. Uh this is developing a name for yourself. It's like a brand. A trademark is for goods. Service mark is for services. It's what customers think of when they see something that's a symbol. Um, a word, a phrase, can be sound. It can even be color. I think most people would recognize, although I couldn't afford a shoe. It probably wouldn't look good on me. The red soul shoe is protected by um trademark. It's a mark under which you sell goods or services. It can be what's called a house mark describing the company like

Lenovo is a brand. Uh MGM Studios had the lion's roar if you remember on the you say oh that must you don't even know need to know what it says you know the lion's roar. It can also be a product that house um offers. So, Lenovo has the ThinkPad as a laptop computer and Rocky the movie was made by MGM. U the rights for a trademark arise through use. If you begin using something, you potentially have um a trademark on it and it can last uh forever. There's no limit on how long it can. Now, registration federally, um, and I should have said at the beginning, I'm only going to be talking about US law on all of this stuff. Uh, so federal registration of a trademark provides certain protections. Before you register uh your mark, you might want you should put TM next to the name you're using or claiming as a mark uh if it's a goods or SM if it's a service. And only after you register it federally. You don't have to register it. Uh but only after you register it can you put the R in the circle. Now the rights you get uh when you have a registered trademark is you're protected against other people using that mark for a given set of goods and services with the exception of what's called a senior unregistered user. So what's that mean? Well, when McDonald's went to register the Golden Arches and the name McDonald's as a for restaurants, uh, it turned out that there was a restaurant, a couple of restaurant chain in upstate New York named McDonald's. And so they could m that unregistered mark of McDonald's and upstate New York from this other entity, they can continue to operate in the geographic re region. But if they were to once McDonald's registered federally um they couldn't move that restaurant to say Arizona because McDonald's would have rights over that. Um uh as I said right to use uh the right to the mark comes when you start to use it. Now recognizing that in order to bring out a product uh to market, you know, you're going to do all your research, the all of the branding, the art, and everything. And if it's only after all of that you actually transact or offer it for sale, that can be very expensive only to find that you don't have rights to that mark. So there is a provision called intent to use where you can go to the trade US patent and trademark office and file an intent to use mark that says I intend to use this symbol name word or anything with these goods or services and they go through the analysis and they say okay that's good you can do that but you then have to within three years from the time that registration is granted actually use it or it expires. I just filed a intent to use registration for one of our companies uh last month before the rates went up on the trademark. It'll take about 18 months I they said now for me to get a full thing, but I have at least nailed that in time. In picking a mark, you should use something fanciful. Examples would be Apple or iPod. I mean, who ever thought of Apple as a name associated with a computer, much less a phone? You don't want to use something that is merely descriptive. In fact, you can't really get a mark on something that's merely descriptive. I went once to file a registration for the term micro dose for low dosage aspirin that they were going to market. if you take a low dose of aspirin, it sort of helps against potential heart attack. And um after back and forth, they've said, you know, look, you're describing what the product does. It's a small dose. Um so we're not going to give you that one. We had to change it a bit. U you should look and see before you start using stuff, is the mark available? And you go to the US patent and trademark office and there's a whole search thing you can use there. Um if you're going to get you know full registration many lawyers will say we ought to do a full trademark or service mark search which would look at everything from you know is it being used on the internet is it uh in state

directories and these things can reports can run I haven't priced them out recently but it could be $700 or thousand dollars or something uh so you're prepared before you go to the trademark office. Okay. All right. So, copyright, it's the right to make and prevent people from copying what you do. Uh, it res it arises from creating a work. So, if I write a letter uh to my mother as an author that I actually have a copyright in that I don't have to register it or anything. It express it protects the expression not the idea or the function. So it's a great fit for music or literature maybe not so well for software. And the reason why does it only protect the expression? Well, you know, if Shakespeare wrote a play about a love triangle and he could protect he had a protection of that so nobody else could ever write anything about a love triangle relationship, you know, a lot of literature would disappear. What you can't do is exactly copy, you know, his particular expression of that idea. Um, federal registration of a copyright is a plus. In fact, if you're going to bring suit uh to prevent somebody from copying, you do have to register it. Uh the duration is long, 70 plus years, I think. U Mickey Mouse was coming up a few years ago and somehow they get did some legislation to extend that. Um the cost to register is low. It ranges depending on what you're doing anywhere from a hundred to $500. And you register at the Library of Congress. and um you have to actually deposit uh the work that you're trying to copyright. So in the case of software the question is well do I have to deposit my source code? I mean anyone can see it then and see what how I'm doing it. So there's a whole procedure for how you can deposit the um source code redacted and a number of things. The idea is so you can prove what it is you're preventing other people from copying. Years ago, I represented um uh arrow maps back when they had paper maps. And I learned that in the map industry, people would put uh phantom roads on a map, roads that really didn't exist. And the reason was so if somebody else came up with that map, they could say, "Well, that you copied it. " Yeah, I don't know if that's why Google or uh, you know, self-driving directions sometimes lead you off into the wilderness, but the other thing that Aeromaps did is they made a street directory book. So in Boston, you know, if you had an address, it would say it's at the corner of Fairfield and Commonwealth Avenue. And people, the city of Boston used that, you know, this is all pre- internet, of course, uh to figure out, you know, where to send if something came in, where do we send the police car or the fire engine or something. So, one year they got a call from the um uh the city saying, well, you know, we don't need to order any more maps. We're good or directories. We're good. Um or they didn't I'm sorry, they didn't um order it. So, the guys at the Arrow said to me, I you know, do you think what do you think's going on? I said, well, you should ask them, you know, have someone call up somebody in purchasing and say, we've noticed you haven't put an order in for our new version of the directory. Uh, can how many can we put you down for? And the person on the other end of the phone said, "Oh, we're not going to do that anymore. We have our own copies. " And so we simply took that statement, put an affidavit and took it to court and Boston paid up right away because they were copying the directory. Um you should even though you don't have to do it, it's suggested that you put a copyright notice on things you want to protect. Uh typically copyright the word um the year, the author, and then all rights reserved. And that's because uh in certain countries, especially Latin America, if you don't do that, you lose some rights. Just put it on there. Don't put the C in the circle until you've actually registered. So, you can see at the bottom of my slide, I put down a copyright notice uh for your venture. This is really important. Make sure you own what you think you own. So the author of a an original work be it you know software uh a book poems or whatever the author

owns that work of created work unless two exceptions one is they're an employee and it's in the course of employment uh or it's uh deemed to be a work for hire and so For example, I had a client who had spent a good deal of money developing an import export computer software system and um they paid an outside uh computer firm to put it together and uh then they found out that firm had sold a license to another one of their competitors and they came and they said to me, "Well, can't we, you know, we paid all this money, can't we stop them? " And uh when we looked into it, we said, "Well, did you have an agreement as to who was going to own it? " And it turned out they didn't. So they had basically spent a half a million dollars for something that they didn't own. Now, the flip side of that is when you as a new venture and you go to deal with a large company uh and you say, "I'm going to do some consulting work for you. " And consulting is a way that many ventures get off the ground. You work with your target customer market and learn more about them and what they want and you make a bunch of money doing it and eventually you say, "Well, now I can turn that into a product. " But that interaction with the large company, they're going to give you a consultant services agreement and guess what it's going to say? We own everything that you create. And you know, don't blindly sign that. I have a standard thing for companies that I work with um which says look we're a um I'll show you IP vision in a in a moment here. Uh if you ask us to do an intellectual property analysis on public data, you can own the specific report that we generate. But if somebody else asks us the same thing with the same parameters, we're going to generate the same report. So you can't own how we generated the report. You can own the actual report. Same thing if you're a software consultant working with a large company, you'll say, "Well, we have a bunch of tools and and modules that we use in our development. We retain ownership of that. You can own the things we put together. uh but we retain and will retain ownership of any you know other things and so you have to negotiate a little bit with that. Uh finally, you should check open source. If you're in software, uh are you using uh open source uh software in a way that violates the general license, you know, if you actually modify the open source, you're supposed to give it back. So, typically there you would have, you know, if you're using MySQL as a database, you know, you're not going to change that co code. Your interface to that code is yours. But if you start to mess with it, uh, you might have a problem. And there are companies, I think Black Duck was one of them, that will run and look at your code to see if you're violating open source. Um, and they, you know, will do that for investors, etc. Now, what about copyright and artificial intelligence? Well, this is a big area right now. So, it's well established that to have a copyright, there has to be a human author. Um the patent office came up with I mean the um copyright an announcement a year and a half ago that says well you know AI creates stuff. So by itself AI can't have a copyright. It's not a human. Um but if you use artificial intelligence and you have sufficient human authorship then you could get a copyright on it. So, what does that mean? We're still trying to figure that out. Um, but you know, think about it. If you use Dolly to make images and you're going to put it in a, you know, a children's book and you write the text, probably okay. What if you use Dolly to do the image and you have chat GPT do the text? Might be okay if you're deciding how to create those two, you know, put them together. It's still up in the air. Um, the issue about using copyrighted material to train models, that's the one that's in litigation now. Uh, you can keep track of all of this at this uh address at the copyright office. That's where they say they'll keep updated on their view of it. So

okay. Um, patents, as I said earlier, a limited time monopoly. It's a federally granted right. Um, you have to apply for it. It's for something that's new, non-obvious, and helpful. Uh, and this along with all the other things where you register things, copyright, trademark, uh, things, these are country by country. You have to register in each There are some treaties that try to harmonize it. Um, but you have to apply. So if I have a patent in the US, uh, I can prevent others from making, using, selling, or importing my invention. So somebody could make my, if I don't have a patent in China, they can make it in China. They can't bring it to the US. I can't prevent them from making it in China unless I have a patent in China. Um, now it's very much like uh real estate. Most people think if you didn't know about it, you'd say, "I have a I have a patent on my invention. That means I can use it. Only I can use it. " Well, that's true. But that doesn't mean there aren't any limits to it. So, if you think about the real estate analogy, all right, I have a right to keep you off my property. I can keep you from trespassing. That doesn't mean that I can actually use my property. What does that mean? Well, what if I had to walk across your property to get to mine, right? You could keep me off your property. I could keep you off my property. we'd have a problem. So, it's the right to prevent others. The claims of the patent are like the fence around. They define what the property is. So, let's see if I can uh the duration is 20 years from filing. Let me give you an example. I use the coffee cup and the handle. Suppose you came up with the idea that was not obvious and nobody had ever thought about of a vessel to hold a liquid. All right, let's And you get a patent on it. Great fundamental invention. Now I come along and I patent a handle. Useful, not obvious. Maybe I can't put my handle on your vessel to hold a liquid and you can't put on my handle because we would be infringing each other's patents. So the only way that can happen is a cross license between the two. So you get the point. Okay. Uh so requirements to get a patent it has to be something new. Uh not obvious. Um prior art must be cited. Prior art is things like published um things that have been published or prior patents etc. has to be useful. That's usually not a problem. If you look at some of the weird patents that have gotten, you know, out there, it actually has to be patentable subject matter, uh, process, machine, manufacturer, composition of matter or any improvement on that. So, originally there was a whole thing for years about whether you could patent software because that's an algorithm and the way it got people started to do it, they say it's really not. It's the machine. It's the use of that with a machine or something that makes it patentable. Uh it has to be not previously offered, sold or publicly disclo disclosed. Now the publicly disclosed is an important thing. It's the enabling disclosure. So if I say to you in this room, well outside of an academic setting, let's say I have invented anti-gravity boots. That's not enabling. I haven't told you how it works, but if I go into details and explain it all in a public setting, then uh that starts a one-year clock. I have one year in the US to file a patent application from the time I did an enabling disclosure or I offer it for sale. And if I don't, I can't get a patent. And this is an issue um in some parts of the world. I was in Istanbul at the second entrepreneurship summit when they had um people from countries all over the world and I was talking to mentoring a team from Egypt and they said, "Oh, we've got this great thing. We have this new wireless, you know, um way of doing wireless that's faster, better. It had all these great stuff. " And I said, "Uh uh well, have you disclosed this to anybody? " And they said, "Oh, yes. we published it in some

prestigious journal. And I sort of I looked at them. I said, um, could somebody figure out what it is you did when from that journal article? And they thought for a moment, they said, they might. And I said, well, I don't know. You may have just blown the opportunity to get a patent anywhere in the world except the US if it's been within one year. And you could just see their excitement and their faces just sort of went. So it's an important thing. You have one year um in the US only. Um it has to be not obvious to one of ordinary skill in the art. And there are different ways of showing uh that it's not obvious. Bob Langanger you heard about last night. uh Bob uh for some of his earlier um patents had arguments with the patent office about look if I look at the literature they say this can't be done and oh by the way people are buying it so it can't have been that I just did obvious to people of ordinary skill in the art if the art was saying you can't do it and then people are buying it um and an important thing since A few years ago, we used to be a first um to u jurisdiction. The first to file the application would win. And there's a great, you know, history if you follow Alexander Graanbell and I think of the guy named Gray. There was a big fight at the patent office. We're now the first inventor to file. So if you don't get to the patent office, if you have to be an inventor, if you get there before somebody else who's invented something, you win. If not, you lose. This becomes an issue with companies when they're doing joint ventures. When you're doing a joint venture between, say, a small company and a large company or even two large companies, there's always a question of, you know, you bring your stuff, I bring my stuff, we do stuff together. who's the real owner of that thing in the middle. Um, and we may learn things and so there are cases where some large companies have gone off and filed invent first inventor type things. So important to remember um okay whoops me back up here. All right. Okay. So um it's the u couple things for your venture. Uh the first you want to have make sure you have a freedom to make uh license and sell your product. So you want to know do you own it? Now just like um copyrights the inventor owns the patent. Uh, and there's some exceptions if you're an employee working for a company called shop rights, but typically companies will have you as u an employee sign an invention disclosure uh an assignment agreement where you agree to assign whatever you come up with to the company. So if you look at um you'll see some patents in the patent office the uh inventor is listed and then you say you go and look at who owns it and it's the inventor. Others you'll see the inventor and then the name of the company. Uh what if it's licensed from the university? Do you actually own that? uh did it go into the public domain because you didn't file something or you made an enabling disclosure or you offered to sell it? Um there have been some cases on people not even actually showing the invention but offering it at a trade show. Um and that can be viewed as an on sale bar to getting uh the patent. Um and then there's a strategy of do you want a patent or do you want to disclose to prevent others and I'll show something about that in a moment. So before you launch, you want to make sure you have freedom to operate. You know, is what I'm proposing to do, does somebody else have a patent that could prevent me from doing it? U because you know, you're going to spend a lot of time and money and if you develop something and then someone comes along and says, "Sorry, you're infringing. " Invent in investors are going to want to know about that. Uh typically, um you'll get a freedom to operate opinion uh from a law firm. That doesn't mean that you're not infringing. It just says, you know, we've looked and we don't think there's a problem with the what you propose to do. And u part of that is with that letter uh pre prevents you from having dam triple trouble damages for willful infringement, which you could if you willfully infringe someone's patent. They can hit you for three times the damages. Um so prior art if you're going to have

freedom to operate you got to figure out what's out there. So this is um see the forest uh which is one of the companies that I co-founded IP vision that's the web address and uh what this was we were doing early stage technology commercialization primarily out of MIT people would come in um and uh professors whatever and they'd say I got this great idea and you know we would look at it and we um try to figure out, well, you know, does it, you know, what's out there? Um, at one point we um raised a bunch of money for a company. We sent um it was going to be it was the nanofuel company and we wanted to make sure if we're going to step onto the stage with a new fuel, we're going to be up against some pretty big players. So, we ought to know what's there. So on the advice of patent council, we hired an outside firm that went and looked all over the world and everything for prior art and it cost us 70 or $80,000 and it took six months or more. Um, and we had the results. But in that six months in the US there were about 5,000 new patents issued per week. So it was obsolete by the time we got it. So we had to figure out is there a better way to do this? and we came up with this idea of patent mapping. Uh, by the way, uh, if you go to if you're in the class or in the MIT community, if you go to see the forest. com and register uh, and send me an email is saying what you're doing, we'll upgrade you to the premium version as part of our give back. But what is it? So, this is an example of a patent map. The boxes on the map are patents or patent applications. The left edge of the box is the publication date or the issue date. The tail to the left of the box is when the application was filed. And the lines connecting the box are the pri are the citations. When a patent issues as part of the prior as the prosecution, you have to disclose to the patent office uh all prior art of which you're aware and that the examiner looks at that and decides whether what you're claiming is allowed over the prior art and they list in the patent what those prior art patents are. And they have significance and there are at least three people involved. There's you as an inventor. There's your patent lawyer who understands something about the technical area. And there's the examiner. And the issue is if you willfully, you know, don't disclose prior art, it can be the basis for invalidating an otherwise good patent because it's viewed as fraud on the patent office. So there are consequences. So unlike the citations you might put in your u you know technical paper, I'm citing my professor because you know he's my PhD committee. I'm going to cite that person's textbook. It may not have anything directly relevant to the paper. There's more spurious um citations and academic stuff. So what we have here is um the Tesla patent and at the time it was issued in um 2010. This was the prior art. These are the prior art patents that it cited. Um this is what it looked like 2023. Everything to the right of that patent were new patents citing the Tesla patent. So, so the idea of being able to figure out what the prior art is and be able to look at who's citing you going forward can help you with a whole bunch of thinking about patent and business strategy. Um, here is the Tesla patent portfolio back in 2018 and here's what it was in 2023. You can see how many patents they have on things. I'm going to come back to Tesla in a few minutes about their patent strategy, but you can pretty much see when you look at these maps, you know, what are people doing? You know, really good one is you got a core patent and you you're filing extensions and those will site the core patent. If you got a cluster of citations like that, that sort of tells you where they're going. The way these things are laid out, the ones in the bottom right are uh either patent applications. Patent applications that are published don't site prior art or they're brand new patents that haven't had, you know, time to be cited when we look at, you know, an individual portfolio.

Okay. So um obtaining a patent you want to think about what to patent when going to prepare an application and then prosecute it. Prosecuting means simply negotiating with the patent office to get the claims on the patent. So the important thing is to figure out what to patent. you know unlike what large companies have done in order to encourage people to file patents is they give awards you know to inventors. So the inventors are there you know filing these things and they end up with a whole bunch of patents. The question is are these actually worthwhile or not. You don't really have the luxury of that as a new venture. So you want to figure out not what I could get a patent on but what do I want to get a patent on? you know what's going to add value and uh how will competitors use uh my technology and you want to figure out what actually what you're doing against the prior art. So we worked with the National Science Foundation SBIR program in phase two of that program. One of the crucial things to getting a phase two grant is that you have uh intellectual property. So we worked with them to look at often when you have a technology there are many places you could go with it you know your beach head market where do you want to go and if you can actually visualize the patent world it can help you make that decision. So we, you know, made a map like the Tesla map, uh, using keyword searches for, you know, say an area, met with one of the SBIR grantees and said, "Okay, well, there's a big thicket of patents up here at the top. " And we looked and we saw, you know, there were some companies there and we looked at the titles without even having to read too deep. And they said, "Oo, that looks that looks like a lot of what we're trying to do. " But these other patents over here, there aren't many of them and we could go there. So we might we think we might switch our whole commercialization effort from where we thought we were going to go to this other area. So that was useful. Did the same kind of process a week or two later. Same map with a lot of cluster at the top. And I said, "Well, this could be a patent thicket. You know, you might not want to go there. " And they're looking at it and they said, "Oh, we know these companies. " and just looking at the title, we're gonna have to dig deeper, but we think that might be exactly where we want to go. I said,"Well, why is that? " And they said, "Well, we think we've solved the problem that they're trying to solve, and they haven't figured it out, otherwise it would have filed patent applications. " And so, in thinking about building something that someone would want to acquire as a strategy for a new venture, uh they said, "We're going to look at this real carefully, and we may double down and go into that area. " and build a portfolio. Uh when to file? Well, again, you want to file before you lose rights. So that one-year period, the public disclosure, don't forget about the first inventor to file. And important in time to uh have a patent to protect your product or services. So a few years ago, I was negotiating with a large consumer uh products company uh for an exclusive license of something we had developed. Uh they were excited about the concept. We had a bunch of patent applications that were in process and I'll explain how we did that in a moment. U and as we're negotiating the deal, there was a whole section that said, well, you know what if these patents don't issue? um you know we're going to cut the royalty or we're going to do this or that and there was a whole couple of pages and just as we're in the middle of that big discussion I got notification that one of our applications that issued as a patent in the US and then two days later in China and I went back to them I said we can just rip up this whole section because we actually have issued patents now and they felt really good about it because you know if they were going to license this they want to build spend a lot of their money building out u the go to market on it etc. knowing that we had a protectable position. Now um as I'm going to talk to you in a few minutes about what the cost of patents are um they can be expensive. Uh one of the things you can do though to in order to get a place placeholder is what's called a provisional patent application. Do you remember how I said that um in the rest of the world if you disclose before you file you won't be able to get a patent? The concept of a provisional patent application was put in the law as something saying well this is really an application. So if you file a provisional that's going to count as filing in other for other countries in the world are going to look at that and say well you did

file. So it's a very quick application you can put in. It doesn't uh has to have a meaningful description of your invention. It does not have to include claims. Um it establishes your filing date priority. It protects it your idea for a year and then you have to actually file a utility application. It's called a full It's fast and cheap there. I think it's $64 for micro. You know, that would be if you're a new venture, 64 bucks filing fee. Uh nothing happens at the patent trademark office. Uh but you've established a date. When you go to file your full application, though, it has to have enough in the provisional for you to be able to say, "My full application is going to fit into the provisional what's described. " So let's say I discovered and nobody else knew that fruits and vegetables were important for human health and I file a provisional and then in the course of the year as I'm going out and talking and figuring my market I realize you know protein is important too and I go to try to file a full application including protein that provisional isn't going to cover it. In fact, a provisional can even be I've seen it where somebody's going to give a paper at a conference and we just slap a cover page on it, file it. Now, patent lawyers will say, you know, you really ought to file and um you know, make it with the claims and everything. And yeah, if you had unlimited amount of money, you could do that, but as a startup, you don't have that. When we were developing the IP vision uh technology, it's a SAS thing. We would have six week development cycles and before we deployed the code we'd sit and we say all right what did we do in this cycle that we think is important and should we file something what did we think about during the cycle that we did not implement that we think might be important that we should file on and uh it was a pretty good discipline and we'd file you 64 bucks we'd file them and we had a series of these things and then eventually 12 months later of course we had to decide whether we're going to you know pay the big bucks for it but it's u it's a good strategy uh for startups um what's in a patent u application it's like a term paper you've got the field of invention usually then the background why what problem is there that you're solving um you do a little sum summary of what it is and then the core of it is the detailed description. Remember I said it's a trade-off. You get a patent if you disclose. Here's where you have to disclose what the invention is. And you have to describe the best mode of practicing it. So you can't say the best mode is this way and then go off and do something else and expect it to have it happen. And the claims are exactly is what your invention. Now the claims those the writing and interpretation of claims that's a highly technical thing for lawyers patent lawyers. So you know that's you don't typically want to do those yourself. This is where you want to spend the money and get somebody who really knows the prior art and knows how to write stuff. Here are some of the costs. uh a range for preparing an application 5 to 15,000. Um I once got a bill for 35,000 for an application and I called up the law firm and I said 35,000 what's going on? Well, it turned out my co-founder was calling the patent lawyer all the time and saying, you know, we should add this and we should do and he didn't tell me and so the meter was just turning like this. So I had to sit down the law for the company. Nobody talks to the patent lawyer without coming through me, right? And you know this my co-founder was a former MIT professor. He's a brilliant guy. And I said, you next time this happens, you're paying for all of the prosecution costs on it. Um the filing fees are u fairly low for a micro, which would be what you would be $64. the prosecution costs. It's like a tennis match. You really can't decide whether this is going to be a two a two-hit rally or what they had at the Australian Open the other day. It was 55 back and forth. So, you know, you put the application in. Typically, the examiner said rejects it and that's a

good sign because if they accept it, you probably haven't tried to claim enough. And so you respond to that, you know, and point that the prior art is, you know, not it it's not really matter in this case for that reason. Then it goes back and then the examiner and you go back and forth and if that keeps going, your cost is going to go up because typically the patent lawyers charge by the hour. Um, you can't really control that very well. Some large companies have tried to do fixed cost patent applications and we've done some analysis that say typically that doesn't get you anything near a good patent because all they want to do is for a fixed cost is get something allowed as a claim. And if I go back to that discussion with the um the big consumer products company, you know, if we hadn't got our uh our patents issued at that time, you know, I wasn't really worried because the language said if we didn't get one claim allowed, you know, at least one claim and one patent allowed. Well, I could craft the claim so small that it would be irrelevant and it would met the requirements of that contract. So, it was kind of stupid on their part. they didn't really understand what they were doing. Uh foreign patent applications get expensive. Here are some of the costs. You can read them. When you go to national phase, um which is means you've say file in the US and you're going around the world. That really can get expensive. There was a general accounting office study back in the early 2000s that looked at uh the cost for a small entity to get and maintain a patent in the 10 major industrial comp countries of the world and it ranged from 350 to $500,000 uh over the life of the patent which is a big number. Uh, by the way, when we um if we're thinking about licensing it, part of our negotiation with an exclusive license, um would be that the license would pick up the patent costs. So, if you can get something licensed before you have to start paying the big bucks, uh that's a reason to do that. Um if it's expensive, what what's another strategy you might do? Well, I call it disclosing. If you have something that you think is a fundamental invention and you talk to your patent lawyer and they think you can get a really strong patent on it, then a strategy is to um uh disclose the others because what you don't want to do is put it out there and have some other people come and pick it fence. It's called they patent all of the key things that are needed to bring that thing as a commercial viability. The Japanese were famous for this. Uh here's so let's here's my uh here's my vessel to hold a liquid. Let's say I have that patent and you come along and say, "Well, you know, maybe it needs a top or maybe I could pat you could come along and say I'll patent a sleeve or maybe a handle or maybe even a insulating version of that. " And if you do that, I'm sort of stuck. I can't go to market with any of those things. You've blocked me in. An example of that is this ring patent. The patent, this little patent in the yellow there, that was a ring patent. All the red patents are from Skybell. When you see a pattern like that of a one company citing one patent of another company, it could very well be a picket fence. So what it means here is if you can get that strong patent on the cup, the vessel to hold a liquid, you could disclose in the patent filing or elsewhere other things but not actually claim it. I've got a vessel to hold a liquid. It's wonderful. It could use there are a lot of things you could do with it. You could put a top on handle an insulation sleeve for hot or cold. You can do all of that. And having done that, that becomes prior art disclosed for other people. So somebody else can can't come along and say, "I want to patent the sleeve because it's already been disclosed. " It's cheap, but you want to make sure it's a cheap strategy, it actually your core patent is going to be strong. Now, back to Tesla. you saw all the patents Tesla had and Elon Musk, you know, was pro- innovation. So, back in 2014, they said, "Look, we're going to make a bunch of our patents available. We're going to license them for free to people because we believe in innovation. " And everyone went, "Yay! " Well, what did what were those patents? Well, they were things around chargers

and other kinds of things. He had patented a bunch of things that were needed in order to make the complete ecosystem for electric vehicles. He's interested in selling electric vehicles. Henry Ford was interested in selling cars. In Henry Ford's case, he didn't need to drill for oil, refine it into gas, build um gas stations, build roads. Other people could do it. In Tesla's case, if he could control through license what people did, but he could enable others to become entrepreneurs and build out the infrastructure, it would help his strategy. Because in the old days, the strategy for patents was patent what you invent and make sure you don't infringe. If you think more broadly, even a nonprofit that you know could patent something to make sure some other people wouldn't do things to prevent if the patents if the nonprofit's uh goal was to get this out into the marketplace like Amy Smith's, you know, incubator I talked about the other day. um then you could at least use that as a control if somebody you know tries to do something that you don't think is in the public interest. Make sense? Think a little bit broader. Okay. Um so you should think about goal oriented IP. You know what it is. Do you have a core technology? Uh product that if you put it out there's a risk people could reverse engineer it? in which case you might want to patent it. Um, if that product has a short time frame, is it worth getting the cost of it if it's going to be leaprogged in two or three years? Um, is your business model to manufacture and sell? Uh, that's one thing. What if you're going to license it? Well, the technology, you better have the IP protection because your L E is going to invest money in commercializing it and they want to make sure that it's protected. So, you would really want an IP strategy if you were licensing. Now, there may be other IP uh nonIP bars to entry that might protect you. you know, if you have to get FDA approval or other regulatory and if you're thinking about that your ultimate thing is you're going to be acquired again, you want to have something that's valuable and there you might want to build up a portfolio of IP so that the person acquiring you, you know, sees that extra value. All right, so practical checklists for you. uh employees, make sure you get an invention disclosure and assignment agreement because as we know if the uh inventor owns if you don't get that. Same with uh copyright. Uh if you're using consultants, make sure you have a work for hire agreement which specifically says you the consultant are going to do X for me and under a work for hire and I'll get to own it. Uh you'll want to have non-disclosure agreements where appropriate. Now typically venture capital investors will not sign non-disclosure agreements and the reason they state is you know we got a lot of people coming in with similar technologies and if we don't fund you but we fund someone else you know we don't want to have anybody claiming we violated an agreement. So again you know don't disclose the secret sauce until the absolute last moment. Um uh you want to in avoid infringement. You want to make sure you have freedom to operate. Am I going to infringe somebody else's patent if I bring this thing to market? Uh understand the patent landscape not only in one time uh but overtime. So to see the forest site, you can update those maps, you know, weekly or monthly and keep an idea of what competitors are doing. And you want to preserve your patent rights, file provisional applications. By the way, there was a real culture thing. We were dealing with this large consumer products company and we talked to their patent people said, you know, you we're going to be in our collaboration. filing provisional applications. And they said, well, we don't really do that. Why not? Oh, they're too hard to track. And we said, listen, guys, Silicon Valley is doing this all the time. you're going to get hammered if you don't figure out how to keep track of this. So, the big companies, you know, were not thinking in this way. U you want to make sure you file timely the patent application and uh you want to make sure you're not going to be picket fence if appropriate. Okay. Now, how to deal with lawyers? They're wonderful creatures. I used to be one. You're purchasing legal expertise

usually by the hour. So already I've been here about an hour. You the bill is going to be horrendous for you guys, I gotta tell you. So you want a disciplined approach in dealing with lawyers. If you come in and dump a notebook from your lab and say, "Write me a patent. " It's going to take a long time. Or if you're like my co-founder and playing pingpong back and forth. So, you want to understand where it is you're trying to do. You want to make sure the attorney is kept informed. Uh, you want to show the invention disclosures, a clear agreement on fees. And don't wait until the last moment. You know, if you come up on the one-year deadline and call the attorney tomorrow and say, "I got to get this filed Monday. " What do you think the bill's going to be? Versus, you know, we're going to have this on file a month from now. uh leverage your technical expertise. Read some other patents in your area. You can do a first draft of everything. After all, you're describing what your invention is. Let the patent lawyer do the claims, but the time you spend doing that uh and reading other people's patents is time you don't have to pay the lawyers for. And then you can read my ten commandments of dealing with lawyers which is on the in the course materials about how to uh streamline your interactions. Um okay the question came up the other night about licensing from universities. So I thought I would give you a rush through that. As I promised you I'm overloading you with information. I think some of it's sinking in. Some people are looking like I need a break. But let's talk about licensing. Um it's um before the by Dole act back in 1980, if the federal government funded research in a university, the federal government owned the resulting IP. It was managed out of Washington. Uh it was only licensed non-exclusively. So think about it. if you're going to build a business, you'd like to have an exclusive license and not against a bunch of competitors. And so the result was few patents were commercialized. Only about 5% of uh patents were commercially licensed. So by Dole came along and said, you know, wait a second, guys. We should give the ownership of this IP that we the government pay for. Give it to the universities. They're closer to the inventors. and let them have the right to license it and keep the benefits from the license. Oh, by the way, they could license it exclusively. So they did and this is what Bidle requires universities. They have to retain ownership of innovations. They have to file the patent inventions, patents. They have to give licensing preferences to small businesses. Um they do provide the government with a royalty-free license. rarely an issue but um they have to develop programs to commercialize this and they have to share royalties with the inventors. As a result, most of the research universities came up with technology licensing office offices to do this. Uh the one at MIT is called the technology licensing office. Interestingly enough, um, in many un MIT historically, in my experience is the easiest one to deal with because of the way they're structured and what their goals are. If you deal with other universities, you know, the primary goal is getting revenue. MIT says, "Look, we want to make sure this stuff gets out there and only secondarily uh do we care about the royalties and what we can get for it. " Um that also makes it organizationally easier uh to report up the chain to saying we're doing it. Uh but that's the mission of the TLLLO. What is the ownership policy at MIT? Uh I haven't vetted this re recently. I don't think it's changed fundamentally, but uh you know go over to the technology licensing office site which is tloit. edu. um MIT owns the patent if it's uh significant use of MIT facilities or MIT administered funds were used let's say for you know research uh they never assign ownership um of the IP they only license it um and they do guarantee sponsors of the research you know the rights to um first rights to the invention so sort of first right to license You heard um Ally last night saying she did her stuff as an undergraduate, so that was a good thing. But she also went to the technology licensing office and

said, "Can you just give me something that says MIT doesn't have ownership in this? " And so there were no sponsor rights in what she was doing. She didn't use significant MIT facilities, didn't use funds, and didn't use MIT's facilities to reduce the practice. That last one's interesting. The reason Kendall Square exists in large part is you have a technology in the lab like um what was it? Lewis's last night. He's going to get a license. He's not going to do the work at MIT. He's going to go across the street to a commercial building and maybe Bob Langanger will come over on his consulting day or whatever, but they're going to build their stuff outside of the university. And that's the whole Kendall Square thing. Uh you could voluntarily um if you convince the TLO to do it, uh say I want to assign my invention that you otherwise don't own. And if they accept it, then they'll you'll just be like uh the same matter as other MIT inventions, including royalty sharing agreements with the inventors. Now, as a startup, um you've got an interesting thing. You're trying to figure out, you know, what market am I going to go to? Where's my customer? You're going to explore that. You're going to try to raise money. Meanwhile, you've got this IP that you need to get out of MIT. If you sneak it out the back door, the investors are going to figure it out. So what do you do? Well, one option, one thing is to get an option. Go to the TLLLO and say, "Look, I would like an option to obtain a license on this thing. " Um, and here are some of the terms. I haven't checked this recently, but it's modest up upfront fee. Um, it allows time for you to go out and test the market and go talk to investors. So, the idea with investors is, hey, here's my technology. Here's our proof of concept with these customers. We need this much money and oh, by the way, we have an option to acquire a license to this technology. All we need is your money and we're ready to start rolling. It's a pretty good way to work. So, what are typical licensed financial terms? Um again I haven't vetted this currently but it'll give you some idea. Um in the case of where the university doesn't take equity um the issue fees that is the license issue fees could run 50 to 150k. Uh you'll have to pay a maintenance license maintenance fee which can be anywhere to like 50% of expected running royalties. You have to diligently try to take the thing to market. You can't just put it on the shelf. They want to make sure it gets out there. Royalty is a percentage of sales, anywhere from 3 to 5%. I'm going to show you some more detail on that in a moment. You have to pick up the patent costs depending on what they are. And you're not required to sponsor any research. If you say look I want to and one of the big things that MIT did was realize that they were licensing this all to big companies and we really and that it was the smaller companies that were the more innovative companies. So they should think about how do we license in smaller companies and the idea is well we could take some equity and that's sort of opened up a whole bunch of what's going on. The terms are basically the same except the royalty is less and the MIT would get an equity uh typically a singledigit ownership which remains um uh fixed through the first round of financing meaning if uh let's say the MIT got 5% ownership and you know now an investor comes in and uh you know invests and gets 20% of the company MIT still has 5% of the company. It's they're not diluted through that first round. Thereafter, they're proportionally diluted with everyone else. And we'll talk about um anti- dilution provisions a little bit later in the presentation if I have time. And there'll be future participation rights. Here are some typical royalties for university patents. These are a few years old. You can go to the uh association of technology managers autumn it's called and these are sort of typical ranges of royalties back when I looked at this a few years ago. Um you can go validate it. Okay. Timeline. We're running out of time. Uh but legal entity. Okay. If you don't do anything

um you could very well have a general partnership. It's one or more persons engaging in business for profit. So, and so what does that mean? You don't need a written agreement. Um, what it does mean is you have joint and several liability. So, if anything goes wrong, I can sue either one of you or both of you. Um, the ownership, if you don't set it forth in an agreement, is based on the amount of money invested. Doesn't work very well for a fund for a founder, right? because the founder isn't putting in much relative to the investor and investors aren't going to want to come in because they don't want the personal liability. So, what do you want to do? Well, typically you um you'll want to do a probably a corporation. Um and if you're a company that's going to likely raise a bunch of money over time if you need to in order to be successful, probably Delaware. Uh Delaware has a more uh defined corporate law. More cases, it's more certain. Um and you should incorporate sooner than later to avoid that personal liability, to avoid liability for a partner. U minimize personal taxes. We're going to talk about that in a moment. There's a YouTube uh video that I did on all of this in more detail. Uh if you do get a corporate thing, you want to make sure you observe the formalities. You know, do things in the corporate name, maintain separate records, um you know, pick a name. I talked about diva the other night. Um there's tax considerations. Uh a corporation is a you know, not a warm fuzzy person, but it's a person. It can be taxed. And if you don't do anything, it's taxed under subchapter C, which means the corporate corporation is taxed and anything that goes to the shareholder is taxed. Two layers of tax. A way to avoid that is to elect to be a subchapter S, which is a pass through, meaning there's no tax at the corporate level. The owners of the corporation have to pick up any taxes on their current on their own um tax returns. uh you have to qualify for it. You have to fewer hund 100 shareholders. You can only have one class of stock. Um you have to file within I think three months of incorporation. You can't flip back and forth easily. Uh some stockholders will not qualify uh as uh for S mainly it's human beings you know some trust. So if a venture capital firm comes in it's going to blow your subchapter S status. So the question is why do we care? You know, look, hey Joe, I'm going to run losses for a few years. I'm going to take this money. I'm going to do development. I'm going to be losses. I'm not paying taxes. Well, it comes when the exit occurs. Many acquisitions, especially smaller acquisitions, are done of assets. You don't buy the stock because if you buy the stock, you get all everything that's associated with that. If you come in and buy just the assets, assume certain liabilities. So in that case the corporation if it sells assets is going to have a gain on those assets taxed at the corporate level if it's a CC corp. If it's an S corp no tax at the corporate level pass through to the shareholders and little example here maybe like a 13% uh difference in tax. The diva people that I talked about the other day said look you know we're not going to be able to do anything unless we take venture capital so I'm not going to worry about subs. I said, "Humor me. Just do it. " And I, as I explained, they got acquired in two years. They saved about $2 million uh in taxes just because they filed the subs. All right, this is a really important one. If you're falling asleep, wake up. This is a big trap. It's called 8 section 83 of the Internal Revenue Code. And it says the following. If you receive property in connection with providing services, you have ordinary income which can be taxed federally what 37% or whatever equal to the fair market value of the property you receive minus what you paid for it. You with me so far? How does it apply to you? Well, suppose I give you $1 million for 50% ownership in your venture. And I say, "Let's set up the company. What's your 50% worth? " Anybody? I'm going to give you a million for half the company. Well, you could say there's a million dollars in cash, so 50% of the company

must be 50% of the cash. So, it could be 500,000. Okay, let's try that. Uh, your shares are worth 500,000. What'd you pay for them? You have ordinary income of $500,000 and a tax rate of say 40%. You owe $200,000. I'm sure you have that in your back pocket. But wait, it could get even worse. Why would I pay 50 100 million for 50% of the company if the other half wasn't worth a million? Now you own 400 Oh, 400,000. Whoops. But wait, it's even worse than that. When do you measure the income? Well, typically stock is vested over time. If I'm going to give you a million dollars for the company and you're going to get stock, how do I know you're not going to take off and run? So, you can have that 50% of stock, but it's going to vest over time, right? So, if it vests over time, we measure the amount of income when the stock vests. So, let's make it simple. Let's say it vests in um you know, two years, three years. I'll give you the actual numbers later. at the time we start your idea is a dime a dozen when it vests two years from now and you've done a great job it could be worth $100 a share there's a case in California where they brought in a CFO finally after a couple rounds of venture capital and they gave him some stock and he said here's my 83b election and they said what's an realized ized. They had a whole bunch of stock issued to employees with vesting. It was a ticking time bomb. The company was going great. Well, the accounting firm and the law firm all got sued and everything because nobody had figured out and told people about 83. So, you have to do an 83b election. If you do it, it says, "I want to measure the income now. " And you have to file it within 30 days of getting the stock. So, how do you avoid this trap? Well, the first thing is you separate in time when you get the stock from when the investment comes in. So, if you show up by typically I'd have people, you know, come in and say, "We got a term sheet. Let's incorporate. " Well, the term sheet is for a million dollars and you know, you gave me the term sheet on Friday. We're going to incorporate if I rush Friday or maybe Monday. What happened between How do I say yours isn't worth a million dollars? Well, if you incorporated four months ago, lots of stuff happens. And at the time you incorporated, it was an issued stock. U it was worth a penny a share. And uh you didn't get stock uh you got stock in connection with providing services back then, not at the time someone put money in. Um question is why does stock not get issued in time? Oh well, we're too busy. You're not sure who gets what. I showed you this diagram the other day of, you know, the dynamics of figuring out how to split up stock. Um so the problem is it can get tricky but you don't want to get caught in that trap. So again if you incorporate early um separate in time when you get your stock from when an event that values it and cash investment certainly values it uh then you have an argument and then file the 83B election. Okay, we're running into um some time issues here. Um uh bunch of questions about uh relationships up front. Uh the founders memo in the materials talks about all of that. That's a memo I put together after spending meeting with three teams from MIT in one week answering the same questions over and over. So I wrote this memo said before you come in read this and discuss it among yourselves so we can when we get here we can actually make some decisions as opposed to having me spend two hours explaining to you what you have to go back and think about. Um founder equity um the amount of equity and who gets it is about culture and negotiated. Keenan Systems is a famous example. Keenan kept all of his stock. His company was acquired for a billion dollars. He owned it all. He paid his employees quite well and when they got acquired, he gave them all a bunch of bonuses. So that was their culture. When thinking about the amount of equity, think about the value of past contributions and the value of what people are expected to do over what

period of time. Um, think about ownership of IP if because you're going to want to put the IP in the company. Investors are going to want that. So that has some value. sacrifice and commitment. Um, one example I saw was a company that spun out of Arrow and Astro with a famous professor and one of his postocs and they came in and said, you know, we don't know quite how to split up the stock. And I said, well, why don't you each go and write down what you think you're contributing and giving up. And so the professor, you know, went and said, well, I'm well known. Uh so that brings you know attracts money. Uh under MIT policy I can consult one day a week. I'll devote that one day to this company instead of getting paid the money I could get paid by Boeing or whatever. Um and a couple other things. The postoc said you know I could go get a job at a company. Here's what the pay is. Uh I'm going to potentially if I do this company give up an academic career. You can understand professor what that is. And so they sat down and each of them describing what it is, they were able to come to some understanding about what was fair where at least they understood what the other side was talking about. You should assume that uh everyone's going to figure out who owns what. Um so have a reason for what you're doing. Uh who gets um the pie and how big are the slices? Well, typically um an equity compensation pool would be like an option or restricted stock and typically the amount is uh for the next two to three years and it's tied to your headcount plan. If we get money in we're going to hire these people. Um in my experience when you have venture capital first outside round anywhere from 12 to 18% is reserve for the equity compensation. Typically, it'll be at the lower end of that if you have more senior people already on board. It'd be on the higher end if you need to hire or bring in, you know, people that are um more experienced. Uh people that can take place in the plan include key employees, directors, consultants. You can go look at and see, you know, what people typically get paid and the like. And again, there's a YouTube video going into more detail on that. This is some example of ownership um that you might expect after two rounds of financing um just based on some historical stuff. There's a slide when we get to the financial projections that allow you to calculate the equity dilution. And given the time I am going to skip the rest of this um it will be you'll see the slides. I'm going to do um a separate uh recording on it. It talks about types of equity compensation and how to use it. We'll talk about instruments that are used when you do financing. Uh and as I explained uh I'm cramming a lot into a short period of time. And so in the interest of our panel that's here, I'm going to call it quits at this point.