Ten Things Every Business Should Know about Intellectual Property: Copyrights, Trademarks, Patents, and Trade Secrets.
1. Your intellectual property is a primary business asset and should be protected and treated as such — with proper documentation of authorized uses, confidential disclosures, initial ownership, and formal recording of any transfers. Fail to do so, and you risk losing the full benefit of your inventions, money spent on goodwill, research and development, and compensation for your creations. Keep in mind that most documentation is open to public inspection.
2. Copyright is a valuable tool. However, if your product literature, website, graphic art, and other copyrightable works are not timely registered with the U.S. Copyright Office, it may be cost prohibitive to stop your competition from copying these works. Generally, the Copyright Act does not require registration for federal copyright protection. However, registration provides considerable benefits. Importantly, in an infringement action, a copyright owner may recover statutory damages and attorneys’ fees only if the work was registered within three months after first publication. Without statutory damages, it may difficult to prove your damages and too costly to hire an attorney to stop infringers.
3. If you infringe someone else’s patent, trademark, or copyright, you might have to abandon your brand, destroy your inventory, change your branding, and even pay another party’s damages and attorney fees. Not only should you keep tabs on your intellectual property, but you also need to make sure you aren’t infringing on another’s intellectual property. For example, let’s say you name your business, buy a sign, build a website, spend money on advertising, create a product a product with the name, and start selling. If that name is confusingly similar to another’s federally registered trademark, you’re in trouble, and out the money you spent on goodwill—if not worse.
4. Trademark rights arise when you use a mark in commerce in the geographic area you use the mark. So, limited territorial trademark rights vest in the first user of a mark in commerce: registration is not mandatory but provides nationwide benefits.
- a. An unregistered prior user has rights only in the products/services they sell in their geographic zone and its natural zone of expansion.
- b. Registration provides nationwide priority. As such, if you attempt to name your company or brand and another user holds the federal registration (or holds common law rights in your territory) for similar goods your investment might be wasted even if you have a state registration.
- c. Nationwide priority freezes prior unregistered users to their geographic territories.
- d. Why Register?
- i. Establishes nationwide priority. The first party to apply for federal registration is generally entitled to nationwide use and ownership of the mark except in those geographic areas where a prior user can establish priority rights (which can include the entire nation).
- ii. Avoids a “prior user” asking you to stop using your business name.
- iii. Discourages others from using confusingly similar marks by making the mark easy to find in a trademark availability search.
- iiii. Grants the right to use the ® symbol when the mark is used for the goods and services listed in the registration, putting competitors on notice that you are serious about protecting your rights.
- v. Avoids investing time, money, and goodwill into a common law mark that is not registrable in the future.
- vi. Grants the right to sue in federal court and, in certain cases, obtain treble damages and attorney fees, thereby providing for potential significant monetary recovery in appropriate cases.
- vii. Acts as a bar to the registration of another confusingly similar mark.
- viii. Establishes a presumption of validity and ownership (and“incontestability” after 5 years).
- ix. Serves as constructive notice of a claim of ownership, eliminating any justification or defense of good faith adoption and use made by a third party after the registration date.
- x. Empowers US Customs and Border Protection to block imports that infringe the mark or are counterfeits.
5. A patent does not give you the right to make, use, sell, offer to sell, or import your invention; it only gives you the right to stop others from doing so.
- a. You receive a patent when your invention is “patentable,” meaning your invention has to be a suitable subject matter, useful, novel, and not obvious. Just because you have a patent does not mean you have the right to use your own invention. Why? Your patent can embody prior patents if your new invention uses components from a previous patent that are new and not obvious.
- b. Example: Caveman 1 invents a tire for rolling down hills for cheap entertainment. Caveman 2 invents a buggy to carry things down hills, which necessarily incorporates the tire but in an entirely different way. Both are patentable, and Caveman 2 need Caveman 1’s permission to utilize the tire.
- c. So your patent gives you the right to exclude others from using your invention. Not the right to practice your invention. If you use your patent you could be infringing on someone else’s patent.
6. Your delay in filing a patent application may result in your invention not being patentable simply due to your prior public use or disclosure of your invention. Keep your international filing options open.
- a. If any of the following occur anywhere in the world before the effective filing date of the patent application you may be unable to obtain a patent:
- i. patenting the invention;
- ii. describing the invention in a printed publication;
- iii. publicly using the invention;
- iiii. selling or offering to sell the invention;
- v. otherwise making the claimed invention available to the public; or
- vi. describing the invention in an issued US patent or published patent application that:
- 1. names another inventor; and
- 2. was effectively filed before the effective filing date of your patent.
- b. However, there is a grace period for the following types of inventor-originated disclosures:
- i. Disclosures made one year or less before the effective filing date; or
- ii. Disclosures in published patent applications and patents.
- c. Consider filing a provisional patent which is a quick and inexpensive way to establish an earlier effective date for your future patent.
7. Establish an ownership plan up front for your intellectual property plan that includes what will happen to your intellectual property rights should you sell any part of the business, dissolve the business, or part ways with any employees or business associates. Then, get it in writing.
8. Anyone you hire to help you develop your inventions might end up owning rights to your inventions unless you get ownership details in writing. For example, without an express agreement, employee–inventors generally own inventions they even where the invention is created within the scope of employment.
9. You may not own your domain or the copyright to your logo, website, or printed materials if you hired a third party to create them for you and you also may not have the right to modify them without permission from the creator. Clearly outline understandings upfront, safeguard domain ownership, seek warranties of originality or open source representations, hold original files, and secure written assignments.
10. Trade secrets, actionable under federal law, must be kept secret by taking reasonable affirmative to keep them under lock and key. A trade secret is information that provides your company economic advantage because your company keeps it a secret and uses reasonable efforts to keep it a secret. Most often in the employment context, a reasonable effort to maintain secrecy means having employees sign confidentiality and non-disclosure agreements.
Please feel free to contact Martin Rogers at Worden Thane P.C. to learn more about protecting your IP.