Intellectual Property is an important asset for any business. Most businesses have some form of intellectual property, whether they realize it or not. Be it an invention, a logo, an industry article, a marketing plan or whatnot, it is property that should be protected and maintained to provide your business with the optimal benefits available.
What is Intellectual Property?
In general, “Intellectual Property” refers to the creations of someone’s intellect that are generally intangible but are granted certain ownership rights under the law that are similar to that of tangible property rights. By law, owners are granted certain rights to use and benefit from their intellectual property to the exclusion of others. Common types of intellectual property include patents, trade secrets, trademarks and copyrights.
Some intellectual property can embody more than one type or form. In such an instance, a choice between intellectual property protections should be considered. Of consideration should be (1) the type and characteristics of protection a particular form will provide, (2) the ease and cost of obtaining the desired form, (3) the cost of maintaining and protecting the particular form, (4) the intended use of the intellectual property and therefore whether the form will give the protection needed to meet the company’s objectives, and more.
Understanding the interrelationship between the various forms is important to not only determine which form should be sought, but also how it will function within the company. For example, a patent right is granted for a specific period of time, while a trade secret may be maintained forever. However, a trade secret is lost once it is made public. Therefore, if public disclosure is necessary for obtaining any benefit from intellectual property, then a patent would be preferred over a trade secret, even if it will expire. However, if public disclosure is not necessary, then a trade secret may be the preferred form, since it can be for an indefinite period, so long as it is properly maintained and shielded from public disclosure.
What is a Patent?
A patent is an ownership right granted by the government on a particular product or process that excludes others from copying, making, using, selling, or importing the invented product or process covered by the patent. The policy behind patent rights is to encourage the creation and invention of new products and processes by providing the owner protection from losses associated with investing tremendous resources into developing an invention only to have it immediately copied, produced and profited by someone else. The patent gives the creator a sort of monopoly over the invention for a period of time that should be sufficient to provide the creator an opportunity to receive a return on their investment before a competitor, who did not have to incur the expense of the invention, is able to copy and compete with a substantially similar product or process.
There are basically three types of patents; utility patents, design patents and plant patents. Utility patents usually include processes, machines, manufactures or compositions of matter. However, they do not include abstract principles, mathematical formulas or aesthetic or emotional reactions of human beings. Design patents provide protection for the ornamental aspects of a product. However, if the design is primarily functional rather than ornamental then it will not qualify for patent protection. A design may also be copyrightable, however unlike copyright protection, the design patent will not cover the design if it is applied to a type of product that is not covered by the patent. Plant patents encompass a very narrow area of patent law. Only asexually reproducible plants are patentable. Plants reproduced by seeds are not.
Because of the exclusive rights patents impose on the market place, they are granted discriminately. To be patentable, the invention must possess (1) utility, (2) novelty and (3) non-obviousness. “Utility” means that the invention must be operable, capable of use or able to achieve some sort of purpose. “Novelty” means something that is not reasonably “anticipated” by the public or an average person. To be “non-obvious” a product or process would not be obvious to a person of ordinary skill in the pertinent art at the time of its invention. The invention cannot be a mere minor variation or modification of an old process, product or technology.
What is a Trade Secret?
A trade secret consists of confidential information that has been developed by an owner that gives the owner a competitive advantage in the market place. It must (1) have an identifiable actual value, (2) be secret and (3) be something the owner takes reasonable steps to keep secret. Examples of information that may qualify as trade secrets include customer lists, business processes, pricing information, marketing programs and more.
What is a Trademark?
A trademark is defined by law as “any word, name, symbol, or device, or any combination thereof… used by a person… to identify and distinguish his or her goods, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” Similar to trademarks are “service marks” which are marks that relate to services as opposed to a product, “collective marks” which are marks that relate to a group or organization, and “certification marks” which are marks that relate to a government or private entity that certifies products or services.
To qualify for trademark protection, a mark must be “distinctive”. There are basically five categories of “distinctiveness”. The strongest is “fanciful” marks. They are marks that are basically a made up term, like “GOOGLE” or “KODAK”. Fanciful marks are the easiest to receive trademark protection, assuming there are no similar marks in relation to similar products or services. The next type of mark with the strongest likelihood of obtaining trademark protection is “arbitrary”. An arbitrary mark is one that is an actual word, but has no meaning in relation to the product or service attributed to it. Examples of arbitrary marks would be “STARBUCKS” for a brand of coffee, “AMAZON” for a bookseller or “APPLE” for a computer company. “Suggestive” marks can receive trademark protection but may be more difficult to trademark if they are too “descriptive.” They include marks that merely suggest or hint at the nature of the goods or services they are related to. Examples would include “COPPERTONE” for sun tan oil or “HANDIWIPES” for dust or cleaning cloths.
“Descriptive” marks are much more difficult to obtain trademark protection. Descriptive marks are those that provide an immediate idea of the ingredients, qualities or characteristics of the goods or services. For example, “CLAIMS MAGAZINE” for an insurance industry magazine or “SOAKER” for a toy water gun. To qualify for protection, a descriptive mark must acquire a “secondary meaning” to the point where the public primarily associates the mark with a particular seller or owner. Otherwise, a descriptive mark will not receive protection. The intentional misspelling of a descriptive term does not change it from descriptive to suggestive.
The weakest category of “distinctiveness” includes marks that are “generic.” A generic mark is one that is simply a common name of the goods or service. A generic mark cannot receive trade mark protection. Some examples of marks that were found to be generic include “GOLD CARD” for a credit card and “HOAGIE” for a sandwich. Sometimes a mark can be so commonly used that while it was not generic when adopted, it can become generic. Examples or trade marks that were at risk of becoming generic include “COKE” for a carbonated soft drink or “KLEENEX” for facial tissues. Although the marketing advantage to having your trademark become so common that it begins to take on a generic meaning could be desirable (“Just ‘google’ it”, meaning research it on the Internet, or “Will you ‘xerox’ this?” meaning make a copy on a copy machine), it can also cost you your trademark protections. Therefore, vigorous marketing efforts must be maintained by a trademark owner to prevent its mark from become so generic that people stop associating the name with the brand owner.
What is a Copyright?
A copyright is a protection that is granted to “original works of authorship.” It generally includes works that are literary, dramatic, musical or artistic. Copyright protection is automatically conferred on an original work and includes the exclusive right to control who can use, copy or make works derivative of the original work (with a few exceptions). However, copyright protection does not extend to an idea, procedure, process, system, method of operation, concept, principle or discovery no matter what form they take. While a work does not need to be registered with the government to receive copyright protection, if there is an infringement, then the type of damages that can be legally recovered are limited and less than what is available if the work is registered.