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Intellectual Property: Which type is right for me?

“Intellectual Property” (IP) is a blanket term that generally includes patents, trademarks, and copyrights, and also encompasses such items as trade secrets, unfair competition, and technology law. Owning an IP asset means that you have the right of exclusion over that particular knowledge or device - that is, the right to prevent others from infringing the protected asset. Because each type of IP serves a different purpose, businesses often acquire and retain IP portfolios to protect all aspects of their operations.

Determining which type(s) of IP protection is right for you involves an analysis of your unique situation. There is no “cookie-cutter” response. It is helpful, however, to have an understanding of the major types of IP, including what each type does and does not protect.

 

Patents

Patents are used to protect “inventions.” There are three different types of patents. The most common are utility patents, which are used to protect processes, machines, articles of manufacture, and compositions of matter (or any new uses thereof). Design patents are non-utilitarian in nature. They cover the unique, ornamental aspects or surface appearance of an article, where the ornamental aspects are inseparable from the object itself (such as a new design for soda bottle). Finally, plant patents (which are relatively rare) cover asexually reproducible plant varieties. (Certain sexually reproducible plants can also be protected under the Plant Variety Protection Act.)

To obtain a patent, an application must be filed with the U.S. Patent & Trademark Office. The application is reviewed by an examiner to ensure that it meets the legal requirements for patentability. After the patent issues, the owner may exclude others from making, using, selling, offering to sale, or importing the patented device. The term of protection is 20 years from the date of filing for utility and plant patents. Design patents are valid for 14 years from the date of issuance.

See the Patent Law Overview section for more information on the process and legal requirements for obtaining a patent.

 

Copyrights

Copyrights are used to protect the creative expressions of authors, artists, composers, and programmers. This includes, among other things, pictures, sketches, paintings, sculptures, books, plays, musical compositions, architectural plans, websites, and computer software. As the name implies, copyrights are used to prevent others from copying your creations. They also used to prevent others from creating derivative works based upon your creations.

A copyright cannot protect an “idea.” Rather, it protects a particular expression of an idea. Thus, if you wrote a book proffering a new theory about ancient civilization, others are free to write about your ideas so long as they do not copy your particular expression of the idea (i.e. they cannot plagiarize your work.) The fair use doctrine also allows for limited use of copyrighted material without permission from the owner, such as quoting short sections from a copyrighted book. The term of protection is for the life of the author plus 70 years, or in the case of works made for hire, 95 years from publication or 120 years from creation, whichever is shorter.

Copyrights arise by operation of law as soon as the copyrightable material achieves tangible form. (For that reason, everybody creates copyrighted material - typically without their knowledge.) While some legal rights apply automatically, there are very real advantages for registering an expression with the U.S. Copyright Office. In particular, it allows the copyright owner to seek statutory damages, thus negating the need to prove actual damages (often very difficult to do) when claiming infringement. Copyrights are typically easy and inexpensive to obtain. They undergo little to no examination at the U.S. Copyright Office.

Since both design patents and copyrights are non-utilitarian in nature, there is some overlap between the two. As a rule, however, if the ornamental aspects of an article are inseparable from the article itself, a design patent is the proper form of protection. This would apply for, e.g. a new sneaker design. On the other hand, if the artistic expression can be separated from the object itself, copyright is the proper form of protection. Certain creations may qualify for both patent and copyright protection (such as a sculpture). Likewise, computer programs, having both utilitarian and non-utilitarian aspects, may qualify for both copyright and utility patent protection.

 

Trademarks

A trademark or servicemark is any word, name, symbol, device, or combination thereof used to identify the source of goods or services in the marketplace. Common law rights for trademarks arise from use in commerce, and are intended to prevent consumer confusion. Federal trademark registration is subject to prior examination at the U.S. Patent & Trademark Office, and can only be granted after the mark is used in commerce (but may be protected for a limited time period in advance via an Intent to Use application). Trademark owners can prevent others from using the same mark, or a confusingly similar mark, to compete in the marketplace. In other words, it forces your competition to base their success on their own merit instead of yours. The term of trademark protection may be indefinite, so long as the trademark continues to be used in commerce and effectively serves to identify source.

Other trademark variants include certification marks, such as third-party certification of organic food products, and collective marks used to show membership in an organization, e.g. the Better Business Bureau. Also important is trade dress, which may be used to protect, e.g., product packaging or the external appearance of a restaurant.

Care should be taken when choosing (and using) trademarks. The strength of any given trademark is largely dependent on a sliding scale based on how closely the mark is associated with the good. Generic names such as Petroleum brand gasoline cannot be registered. Arbitrary or fanciful terms, such as Apple Computers® or Pepsi®, on the other hand, are very strong marks. Although the term of trademark protection may be indefinite, a trademark owner can lose that protection if the mark no longer effectively identifies source. For example, “escalator” is a former trademark that has achieved generic status through common usage of the word. Kleenex® could also become a victim of its own success. Generally, when the trademark name is used, it should be followed by the generic description of the product, e.g. Kleenex® tissues, to prevent the mark itself from downgrading to a generic description of the product being sold. The trademark should be an adjective, not a noun.

 

Unfair Competition

Unfair competition is an equitable doctrine that is related to trademark law and somewhat unbound by rigid rules. Unfair competition can occur if someone tries to pass off a product as that of another (think $20 “Rolex®” watches being sold on the street corner of Times Square.) It can also occur when copying trade dress, such as unique packaging, in a way that would cause consumers to be confused about the source of the product. Due to the likelihood of consumer confusion, Bette Midler once successfully sued an advertising agency that used a singer with a voice similar to hers. Unfair competition also covers such things as false advertising and disparagement.

“Famous” marks are also entitled to protection from dilution and tarnishment. Dilution occurs when someone uses the same or highly similar trademark on different goods or services, which dilutes the strong association that consumers have between the mark and the source. Tarnishment occurs if someone creates a negative image of the trademark in the public’s mind through an association with unsavory, unrelated goods or services.

 

Technology Law

Technology law includes internet domain name registration. In particular, the Anti-Cybersquatting Consumer Protection Act (ACPA) provides protection from “cybersquatters.” Cybersquatters register famous trademarks as domain names and then attempt to license or sell them to the companies or individuals that own the trademark and that have invested large amounts of money in developing the goodwill for such mark. If it can be shown that an infringer is using your mark or a confusingly similar mark in bad faith, you may be able to cancel their internet domain name or have ownership and control of the domain name transferred to you.

Website developers should also be aware that trademark infringement has been found to occur when website owners have used competitors’ trademarks in their keyword (or “metatag”) terms. These are terms that are not displayed to a website visitor, but can be picked up by internet search engines, such as Google™.

 

Trade Secrets

A trade secret is simply information maintained as a secret that provides a commercial advantage. This may include chemical formulas, manufacturing processes, recipes, and customer lists. Trade secrets are not registered like patents, copyrights, or trademarks. To acquire legal rights in trade secret information, businesses must take reasonable precautions to protect the information from disclosure. To the extent that it is revealed to third parties, it is generally protected by a non-disclosure agreement.

Trade secrets are sometimes preferable to other forms of intellectual property, but there are limitations when taking this approach. There are no formal registration requirements, and the term of “protection” is indefinite so long as you are able to retain the information in confidence. In some cases, you may never want your secrets revealed. The complete recipe for Coca-Cola®, for instance, is one of the most highly protected trade secrets in the world.

On the other hand, trade secrets may be vulnerable to attack. A competitor who is able to successfully reverse-engineer your product can then market a copy of it without consequence. A competitor can also market a technology that they have independently invented (even if it is exactly the same as yours.) In certain circumstances, this competitor may actually be able to apply for patent protection and then sue you for infringement. The decision to apply for a patent or keep the information as a trade secret should be made after evaluating the pros and cons of each approach.

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