Entrepreneurs, startup companies through to the largest international companies each have a common trait – to protect what is rightfully theirs in competition with other businesses. The most common and powerful way to protect the “crown jewels” of a company is by the use intellectual property protections. New companies and first time entrepreneurs need to be aware of their rights so that their important work is not given to the public to be freely copied.
The marketplace has become more competitive than ever, with consumers having so many choices among all the emerging technologies and businesses and the points of differentiation becoming more subtle. This growing challenge makes protecting intellectual property critically important and is why it needs to be near the top of the list of a startup’s priorities. The four types of intellectual property are among a company’s most valuable business assets: trademarks, copyrights, patents, and trade secrets.
To properly protect intellectual property, you need to know what category of protection best covers the item, good, or service. Below is an overview of each area of intellectual property (IP) protection available and what it covers.
A trademark is a word, name, symbol, or logo used in connection with a product or service. Trademarks help to identify and distinguish the product or service from its competitors. Although “common law” rights in a trademark can be established merely by using it in commerce (e.g., via sales for products or advertising for services), these rights are usually limited to the area in which the business is located. Registering a trademark with the U.S. Patent & Trademark Office provides the holder with a legal presumption of exclusive ownership, and notifies the public that the user claims ownership.
Trademarks can be protected through registration with the state or federal government. If a trademark is registered, someone with a similar mark who applies for protection may be denied and should consider ceasing to use the possibly conflicting mark to avoid being challenged or sued. Trademarks can be federally protected by an “actual use” registration or by an “intent to use” (ITU) registration. The ITU applies if the owner has not yet begun using the mark, but has a bona fide intention to use it in the near future such as with a planned future product. In this regard, the ITU can act as a form of “placeholding” of the mark to help limit surprises or challenges in the future when the new product is launched.
A copyright protects an original work of authorship “fixed in a tangible medium of expression.” For example, it protects books and other written works, artwork and other images, music, and many other things. While copyrights are often associated with protecting novelists and musicians, they can also be used to protect computer code, software, and apps. Although copyright rights begin when the work is created, the copyright must be registered before a lawsuit can be filed for infringement of a U.S. work. Registration of the copyright is important, as statutory damages and attorney fees may be available based on a timely copyright filing.
If infringement of a copyright is on a website, a Digital Millennium Copyright Act (DMCA) Takedown Notice can be sent to the web host or platform. Although issuing the DMCA Takedown Notice in copyright matters does not entitle the owner to damages, the Internet Service Provider is required to remove material that appears to infringe a copyright.
There are two types of patents, a utility patent and a design patent. A utility patent covers an invention for a new machine, system or other useful invention. A design patent protects purely artistic or ornamental designs (i.e. non-functional characteristics or features of an item). The steps for filing a utility patent application are different from a design patent and costs vary depending on the nature of the invention. Patent rights are only protected after filing, with strict disclosure deadlines. In the U.S., a patent application must be filed within a year of public disclosure or sale of an invention. Most foreign countries require a patent application to be filed prior to any disclosure. These rules are why it is very important to consider filing a patent application quickly. A U.S. patent gives the owner the exclusive right to exclude others from making, using, offering to sell, selling, or importing the product for a specific period of time (20 years for a utility patent ad 14 years for a design patent.
A trade secret is highly confidential information and materials such as product development plans, financial records, customer lists, innovative ideas, or computer software and applications. The primary methods to protect a trade secret is to take sufficient reasonable precautions to keep the information and materials confidential, such as maintaining strict company disclosure policies and allowing access to material by only those “with a specific need to know.” Prior to allowing access to confidential information, non-disclosure agreements should be signed and kept on file. Trade secret protection can extend for an unlimited duration, unlike the limited duration patent protection, provided it’s kept “secret.”
In order to best protect your valuable intellectual property, it may be necessary to apply for protection in one or more categories of intellectual property. It is highly recommended to consult an intellectual property attorney early and often to recommend and assist in properly protecting your valuable intellectual property.