In today's business environment the field of intellectual property (IP) is booming. Businesses must guarantee their rights of intellectual property to protect their inventions, patents, trademarks, copyrights and trade secrets. Understanding what IP is all about will help protect your company's IP rights and avoid unforeseen costly claims.
PATENTS
A patent is a grant issued by the United States Government giving you the right to exclude all others from making, using or selling your invention within the United States, its territories and possessions for a set period of time.
Generally, patents fall into one of three categories: utility, design or plant. The most common of these categories is the utility patent, which serves the purpose of protecting the function of an invention. Since the original Patent Statute was passed by the First Congress in 1790, nearly 6.5 million utility patents have been issued by the Federal Government. In contrast to the utility patent, a design patent protects a new, original and ornamental design. Newly issued utility patents expire roughly 20 years from the date of filing the patent application, while a design patent has a 14-year term.
If your invention falls within the allowable parameters of "patentable subject matter," the next question is whether your invention meets the statutory standards of "novelty," "usefulness" and "nonobviousness."
Each of these standards is a term of art and has been argued extensively in court. "Novelty" is perhaps easiest to define – essentially it answers the question whether anyone else has done identically the same thing before. The question of "nonobviousness," the most hotly contested issue regarding patentability, addresses whether or not your invention is obvious in light of prior art. The final standard of "usefulness" or "utility" requires some minimal demonstration that the invention has beneficial use.
Patent statutes also establish other hurdles that will bar the issuance of a patent on an invention. The biggest practical considerations are the publication, on-sale, and public use bars. The patent statute provides that you are entitled to a patent on your invention unless the invention was in "public use" or "on sale" in this country, more than one year prior to the date of the application for patent in the United States. The rationale for these bars is that inventors should not be able to test the commercial waters for a long period of time before filing for a patent. There is also a fundamental unfairness in permitting inventors to reach back and claim exclusive rights to information that they have seemingly dedicated to the public, so the law cuts off that possibility after a reasonable time.
To obtain a patent, you must file an application with the U.S. Patent and Trademark Office (www.uspto.gov). Your application must include a "specification" describing and precisely claiming the invention. The Patent Office assigns each application to an examiner with technical knowledge in the pertinent technology. The examiner conducts a search of the prior art and determines whether your invention complies with the legal requirements of patentability. If the examiner believes that your claims and specification comply with relevant laws, the examiner allows the claims to proceed to issue.
TRADEMARKS
A trademark includes any word, phrase, symbol or design that identifies and distinguishes your product(s) from those of others. Federal registration is not required but can secure benefits beyond the rights acquired by merely using the mark. For instance, the owner of a federal registration is presumed to be the owner of the mark and is entitled to use the mark nationwide. In fact, after five consecutive years of registration, a mark may achieve "incontestable" status, which provides a number of added benefits like a conclusive right to continue to use the mark.
If your trademark is not registered with the U.S. Patent and Trademark Office, most states provide common law trademark rights. Generally, state registration is desirable when a mark cannot be federally registered and, in some cases, as an interim measure until a mark can be federally registered. And federal law still protects your state registration against unfair competition.
So what defines trademark infringement? In general, a mark is infringed upon when two substantially similar marks are used to designate similar goods and/or services, creating confusion.
Unlike copyrights or patents, trademarks can last indefinitely, or as long as you continue to use the mark to identify goods or services. The term of a federal registration is ten years, with ten-year renewal terms. However, between the fifth and sixth year after the date of initial registration, you must file an affidavit setting forth that your mark is still being used. If no affidavit is filed, the registration will be canceled.
COPYRIGHTS
Fundamental to the law of copyright is the distinction between an idea and an expression of that idea – protection extends only to the expression of the idea and not to the idea itself. In other words, copyright protection is not available for any procedure, process, system, method of operation, concept, principle, discovery or mere research and effort. Copyright does protect literary works; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; motion pictures and other audiovisual works; and sound recordings.
It is surprising how often a company enters into a "handshake deal" with their key outside service providers, which unfortunately leaves the company with nothing more than a nonexclusive license to use the deliverable. To protect yourself make sure that when you hire a service provider to create copyrightable work you ask the provider to sign a "work for hire" agreement. That way, your company "owns" the deliverable. Additionally, confidentiality agreements and/or non-compete agreements should be a matter of protocol from your key employees and outside service providers and vendors.
It's interesting to note that the use of a copyright notice is highly beneficial, but is no longer strictly required under U.S. law. A copyright notice informs the public that the work is protected by copyright, identifies the copyright owner and shows the first year of publication.
TRADE SECRETS
Another important decision you face is the protection of your business' proprietary information or trade secrets. The courts have liberally defined trade secrets to be any formula, pattern, compilation, program, device, method, technique or process that is used in your business. Certain types of information are not given trade secret protection because they lack the required competitive "economic" value.
So how do you protect your company's proprietary information? Should you treat it as a trade secret, which must be held confidential? Or, maybe you should get a patent in all the major countries where the product may make an impact. For example, if Coca-Cola had received a patent on their syrup formula (versus treating it as a trade secret) the patent would have expired about 100 years ago. It's reported that the Coca-Cola syrup formula is still locked in a vault in Atlanta. It's a secret taste that has never been "reverse engineered" or duplicated. Coca-Cola made a smart decision when it chose the trade secret route rather than the patent route to protect its proprietary information.
If, unlike the Coca-Cola formula, your business' proprietary information is easily "reverse engineered" or, for other reasons, it's not feasible to keep your proprietary information secret, then patent protection may be your best route.
Your intellectual property can be an invaluable asset for your company. And protecting your intellectual property can mean the difference between operating in the black and operating in the red. It is in your best interest to jealously guard and clearly understand your intellectual property rights.