Intellectual Property Issues for Small Businesses

When choosing a mark, you will want to select one that differentiates your products and services from those of your competitors. In addition to traditional trademarks (^TM) that protect names and words used in the selling of goods, service marks (^SM) exist to protect names and words that are used in the selling of services. Aside from the distinction that trademarks focus on goods, and service marks focus on services, trademarks and service marks are in all other respects virtually identical. Be aware that you may own a mark that is both a trademark and service mark, as long as it is used in both ways. To learn more about marks, visit: http://www.uspto.gov/web/offices/tac/doc/basic.

Once you have selected a mark, you should conduct a search to determine whether your proposed mark may infringe on an existing one. You can search online at: http://www.uspto.gov/tmdb/index.html. Or, you can perform a trademark search in the United States Patent and Trademark Office (PTO) public search library. The search library is located on the second floor of the South Tower Building, 2900 Crystal Drive, Arlington, Virginia 22202.

As an alternative to using the PTO public search library, you may wish to enlist the assistance of a company that provides trademark search services, such as:

• CCH (Commerce Clearing House) 300 Park Ave. South, New York, NY 10010, tel. (800) TRC-MARK (http://www.cch-corsearch.com/)
• Thomson & Thomson, 500 Victory Road, North Quincy, MA 02171-3145, tel. (800) 692-8833 (http://www.thomson-thomson.com/)
• CSC The United States Corporation Company, 1090 Vermont Avenue, N.W. Washington DC 20005, tel. (800) 833-9848 (http://www.incspot.com/)

To determine whether there is a conflict between your proposed mark and an existing mark, consider how the PTO decides whether there is a conflict. Upon receiving an application for a mark, the PTO determines whether consumers would confuse the goods or services that one company produces with another company.s products if the PTO allowed both marks to be used. The principal factors to be considered in reaching this decision are the similarity of the marks and the commercial relationship between the goods and services identified by the marks. To find a conflict, the marks need not be identical, and the goods and services do not have to be the same.

Once you determine that there is probably not a conflict between your proposed mark and an existing mark, you can obtain rights to a trademark from either actual use of the mark, or the filing of a proper application to register a mark with the PTO stating that the applicant has a bona fide intention to use the mark in commerce. Federal registration is not required to establish rights to a mark, nor is it required to begin use of a mark. In other words, you can be protected by simply using a mark publicly or in commerce, but there are certain benefits to registration. By registering your mark with the PTO, you benefit in the following ways:

• Constructive notice nationwide of the trademark owner.s claim;
• Evidence of ownership of the trademark;
• Jurisdiction of federal courts may be invoked;
• Registration can be used as a basis for obtaining registration in foreign countries;
• Registration may be filed with U.S. Customs Service to prevent importation of infringing foreign goods.

You can register by filing an application with one or more state agencies, with the PTO or with both. Federal registration is generally preferable, because the benefits of state registration are available only in the state of registration. The benefits of federal registration are available nationwide. State registration and renewal periods vary from state to state. The application must be filed in the name of the owner of the mark -- usually an individual, corporation or partnership. The owner of a mark controls the nature and quality of the goods or services identified by the mark. Unlike copyrights or patents, trademark rights can last indefinitely if the owner continues to use the mark to identify its goods or services.

The term of a federal trademark registration is 10 years, with 10-year renewal terms. However, between the fifth and sixth year after the date of initial registration, the registrant must file an affidavit setting forth certain information to keep the registration alive. If no affidavit is filed, the registration is canceled.

A registration application typically asks for: (1) a description of the trademark; (2) an explanation of how you are using it or plan to use it in the future; and (3) a statement that you believe no one else has a right to use it. An applicant who has already commenced using a mark in commerce may file based on that use (a "use" application). An applicant who has not yet used the mark may apply based on a bona fide intention to use the mark in commerce (an "intent-to-use" application). These PTO application forms can be downloaded from the USPTO website at http://www.uspto.gov/web/offices/tac/doc/basic. For the purpose of obtaining federal registration, "commerce" means all commerce which may lawfully be regulated by the U.S. Congress, for example, interstate commerce or commerce between the U.S. and another country. The federal registration process can take a year or more. The filing fee, at present, is $245.

To file a registration application, you can either use the Internet, or do it the old-fashioned way. The PTO.s Trademark Electronic Application System (TEAS) allows you to download mark registration applications and to fill out and file your application electronically. You may want to explore TEAS online at (http://www.uspto.gov/teas/index.html). Should you choose to mail your application manually, the application and all other correspondence should be addressed to "The Assistant Commissioner for Trademarks, 2900 Crystal Drive, Arlington, Virginia 22202-3513." The initial application should be directed to "Box NEW APP / FEE." The applicant should indicate his/her telephone number on the application form. Once a serial number is assigned to the application, the applicant should refer to the serial number in all written and telephone communications concerning the application. More detailed information about the registration process is available on the USPTO website at (http://www.uspto.gov/web/offices/tac/doc/basic/registration.html.)

There are a number of things you can do to protect your trademark. Some things you should consider are as follows:

• Use the symbol . with the mark if you have not yet obtained a federal mark registration for the product you provide.
• Use the symbol ^SM with the mark if you have not yet obtained a federal mark registration for the service you provide.
• Always use the symbol . next to the mark if your mark has been placed on the federal trademark register.
• Use the mark in the form described in the federal registration, including matching colors, print type, etc.
• Make sure that all licensees, salespeople and distributors use your marks properly.

For more information, you may want to read some of the PTO.s most frequently asked questions (FAQs)) about trademarks.

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Part II: Trademarks & Your Internet Domain Name:

Among the issues you might consider when naming your business is the relationship between your trademark and the domain name of your business. web site. Since you will likely want to use your trade or service mark as the domain name of your web site, a little research early on can save you lots of frustration later. Be advised that applications for registration of marks consisting of domain names are subject to the same requirements as all other applications for federal trademark registration.

In order to secure a Fully Qualified Domain Name (FQDN) for your business, it is necessary to be comfortable with the language of the Internet and to understand the domain registration process. The Internet.s domain name system (DNS) evolved to make it easy to find a particular site by using a structured set of elements. These elements, known as uniform resource locators (URLs), are composed of a protocol, a host name and a domain (for example: www.verner.com). Domains are, at the very least, two-part entities: the top-level domain is the second part (often .com or .org), and the subdomains precede it ("verner.com" is the domain in the above example. "com" is the top-level domain and "verner" is the subdomain). More than 120 different companies now administer the registration of domain names. All domains must be unique; therefore you will be unable to register a domain name if it has already been selected.

Naturally, most businesses want to carry over their mark recognition onto the Internet. To make it simple for your customers to find you online, you will probably want your trade or service mark and your domain to be one and the same. Assuming you are about to register your mark and have checked for conflicting marks, the next place to check for conflict is with a domain registration company regarding your desired domain name (which is your proposed mark). Before you register your mark - let.s say it is "New Service" - check to be sure that "newservice.com" has not already been registered as a domain name. If your desired mark is free of conflict with other marks, but has already been registered as a domain name, you may want to consider choosing another element to register as your mark.

Alternatively, if you are setting up shop online first - i.e., registering your domain name before registering a mark - you should still take a moment to think about trademarks. If you plan on perhaps registering your domain name as a trademark in the future, then perform a search for a mark that has already been registered with your proposed domain name before you acquire a domain name. Keep in mind that even if the domain name you choose for your company is available, the name (i.e., the words or elements that compose the domain name), may already be registered as a markby someone else, precluding you from registering your domain name as a mark.

Most domain registration companies have a free search function that will allow you to determine whether the domain you want has already been registered. A simple search of the Internet will yield many options. If your desired domain is still available, then you can proceed with the domain registration process, either by doing it yourself or by going through your Internet Service Provider (ISP). There are costs and benefits to either route, so be sure to do some research and pick a route that meets your needs.

Trademark Links:

• To learn more about marks visit the US Patent & Trade Office at: http://www.uspto.gov/web/offices/tac/doc/basic
• You can search the Trademark Database online at: http://www.uspto.gov/tmdb/index.html
• Or you can download PTO application forms at: http://www.uspto.gov/web/offices/tac/doc/basic
• Trademark Electronic Application System: http://www.uspto.gov/teas/index.html
• See more detailed information about the registration process at: (http://www.uspto.gov/web/offices/tac/doc/basic/registration.html
• PTO.s most frequently asked questions (FAQs) about trademarks can be found at: http://www.uspto.gov/web/offices/tac/tmfaq.htm

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Part III. Patent Law

If your business relies on new technology that you have created or a new process that you have invented, you may want to seek a patent to protect your innovation. A patent gives an inventor the right to prevent third parties from making, using or selling the patented subject matter.

The term of a new patent is 20 years from the date on which the application for the patent was filed in the U.S. or, in certain cases, from the date that an earlier related application was filed, subject to the payment of maintenance fees.

The patent is a grant of a property right by the Government to the inventor. The U.S. Constitution permits Congress to provide for patents to encourage useful inventions. The PTO may issue a patent to an inventor. The patent itself provides a detailed description of the invention, and how it is used or how to make it. In addition, each patent has at least one "claim," which summarizes what the inventor asserts to be his or her invention. Patents can have lots of claims, ranging from the general to the specific, if the invention warrants them. If someone other than the inventor starts making, using or selling what is described in any claim of a patent, the patent is infringed. An inventor has the right to stop such an infringement and may be able to obtain money to compensate for any damage or injury caused by the infringement. This is called the patent right. The basic idea behind patents is to encourage inventors to make their creations known to others so that everyone working in a particular field can develop further inventions based on the most up-to-date technology -- or get a license to use the creations.

There are two main types of patents:

• Utility Patent: "Any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof"
• Design Patent: "Any new, original, and ornamental design for an article of manufacture"

An inventor must demonstrate that his or her invention is "novel" in order to obtain a patent. This means that the invention must not be obvious to the hypothetical person having ordinary skills in the subject matter. It must also have some utility and not be frivolous in nature. Further, it is necessary to demonstrate that the invention can be made operable.

Before you apply for a patent or decide to base your business plan around an innovation that you believe to be patentable, you should conduct a search to determine whether your innovation may infringe on an existing patent. This search will disclose information about published articles and issued patents and can help you determine whether your invention stands a fair chance of receiving a patent. A preliminary search usually costs several hundred dollars and is best done by experienced patent attorneys. Increasingly, there have been established online patent search companies.

An application for a patent is made to the Assistant Commissioner for Patents and includes: (1) a written document which comprises a specification (description and claims), and an oath or declaration; (2) a drawing in those cases in which a drawing is necessary; and (3) the filing fee.

The application for a patent will not be forwarded for examination until all required components have been received. All applications received by the PTO are numbered in serial order and the applicant will be informed of the application serial number and filing date by a filing receipt. The filing date of an application for a patent is the date on which a specification (including at least one claim) and any drawings necessary to understand the subject matter sought to be patented are received by the PTO; or the date on which the last part completing the application is received in the case of a previously incomplete or defective application. For more information about applications, visit: http://www.uspto.gov/web/menu/pats.html.

You must file for a patent within one year of the date the invention was in public use or on sale in this country. If the invention has been described in any printed publication anywhere in the world, or if it has been offered for sale anywhere in the United States, for more than one year prior to the time an application for the patent has been filed, a patent will not be issued. Even your own use (in certain circumstances) and sale of the invention for more than a year before your application is filed will bar your right to a patent just as effectively as though the use and sale had been done by someone else.

Patents are granted on a national basis. Therefore, a patent granted in the U.S. does not provide an inventor any rights in any other countries. Patent laws in other countries can vary significantly from those in the U.S., so it is recommended that you employ an experienced patent attorney if you are seeking patent protection outside the U.S.

There are a number of things you can do to protect your patent. Some things you should consider are as follows:

• After you receive a patent, you should place a patent notice on, or in, the product.
• If your patent application has been filed and is still pending, you may wish to place the words "Patent Pending" on, or in, the product.

Patent Links:

• For more information about Patent applications visit: http://www.uspto.gov/web/menu/pats.html (http://www.uspto.gov/web/menu/pats.html)
• For more information generally on this area of the law, visit the US Patent and Trademark web site)

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Part IV. Trade Secrets

A trade secret right allows the owner of the right to take action against a third party who breaches an agreement or confidential relationship or who deals or uses other improper means to take secret information. Examples of trade secrets include the following:

• Computer programs
• Customer lists
• Formulas

Of potential concern to some businesses are employees who leave the company and may disclose information regarding the company.s trade secrets. There are agreements that an employer can enter into with his or her employees in order to protect the business. These agreements can provide for confidentiality from an employee even after termination from employment, and can protect the business. valuable intellectual property.

Generally, state law governs trade secret rights. Federal and state courts usually consider the following factors when deciding whether information constitutes a company.s protectible trade secret:

• The economic value of the secret.
• The company.s efforts to keep the information secret.
• The time and money the company spent on developing the information.
• The ease or difficulty with which outsiders can independently obtain the information.

It is recommended that a company take every reasonable effort to protect its trade secrets. Recommended steps include entering into nondisclosure agreements with employees and other companies to whom the trade secrets are disclosed, clearly marking trade secret information as confidential and restricting access to trade secrets on a need-to-know basis.

Trade secret laws protect the trade secret owner from third parties who acquire the information through inappropriate means. Unlike patent law, however, the owner of a trade secret right has no protection from a third party independently developing the same information.