Patents, Trademarks & Copyrights

Intellectual Property Primer for Entrepreneurs

Chris Holst, Attorney     www.holstlaw.com

 

Anybody thinking about running a business should have a clear understanding of what intellectual property law is, and how it can help a business to succeed.  Generally, there are four separate bodies of law that make up the category called intellectual property.  Each has different rules, and a different rationale for its existence. Each protects a different kind of intangible asset that a business can create for itself.  All businesses will develop some intellectual property assets, whether intentionally or unknowingly.  Getting started with a clear picture of what IP rights are and how they're acquired will give your business an edge against competitors who ignore or disregard IP issues.

 

If you have questions about how the law of intellectual property affects  a particular situation that you are in, you should consult with an attorney who can determine just how the law (and all of its twists and exceptions) applies in your case, however the following synopses of the way the law works should put you on the right track to identifying the issues that might apply to you.

 

TRADE SECRETS

 

When a business discovers a formula or a method of doing something, or compiles a bunch of information, or otherwise comes into valuable knowledge, and takes all reasonable steps to keep that knowledge an internal business secret, the law will provide protections against others who would misappropriate it for their own gain.  Trade secrecy law can be viewed as a subset of unfair competition law, designed to help a business that is being forced to compete, essentially, against itself because somebody nefariously lifted their secrets.  Theft of trade secrets is also a crime in Pennsylvania, and the criminal aspect of the law can  (and has) been employed against employees leaving a company on unfriendly terms and taking internal know-how with them.   Trade secrets have no expiration date under the law, but are protected for as long as they are valuable secrets.  The reasonable measures that demonstrate an effort to keep trade secrets secret include limiting access to the secret information, requiring those with access to it to have signed confidentiality and non-disclosure agreements, and otherwise treating the information as valuable secrets.  If somebody independently discovers or recreates your secret, whether by sheer smarts, or by reverse engineering  there is no legal relief that trade secret law offers.       

 

TRADEMARKS

 

Trademarks are the way the law protects a business' investment in its marketing and public perception.  Trademarks had been recognized under English Common Law since well before the American colonies broke away from the British empire, and so has been a part of the law of our land since the US became a country.  Trademarks are at the intersection of consumer protection law and intellectual property law, because they are a powerful, but limited, property right in the symbols that consumers come to associate with a source of particular products.  When you get a business started, it is important to make sure that the marks you're planning to use don't infringe on the trademark rights that some other business already has.  If your new marks infringe on somebody's established rights, they can use the law to make you stop using them... and pay your profits over to them... and pay their attorney's fees.

 

When you think of a trademark, don't make the mistake of thinking that it is a monopoly on a word or symbol.  The exclusive rights a trademark gives extend only to the boundaries of the market your product is in and the spillover beyond that to where a potential customer is likely to be confused about source or sponsorship.  Nobody can just file a trademark application and own a word because they did.  They'd only have the right to stop anybody else who competes with them in the same market from using a mark likely to be confused with theirs.  That gives them the power to stop counterfeiters, and people freeriding on their investment in brand identity.

 

Beyond the common law trademark rights that develop when you start using a mark, the Federal government has enacted trademark laws that establish a national registry of trademarks, and gives registered trademarks special rights and privileges above and beyond what the common law provides.  Federal registration comes with a number of benefits, most importantly it creates a presumption of nationwide notice that the registered trademark is owned and used by the registrant.  Unlike common law trademark rights, which are limited by not only the product market one trades in, but also by the geographic market the mark is used in,  Federal registration gives a mark owner rights  nationwide, which are only trumped by actual  use of the same mark prior to the federal application date.  

 

All trademark rights carry responsibilities with them.  Under common law and Federal law, a mark owner is obliged to police and defend the mark, in other words to keep an eye out for infringing uses, and not to tolerate them.  That means sending nasty notes ordering them to cease and desist, and following that up with legal action if necessary.  An undefended mark loses its protectability over time.  It is a defense to infringement that the mark owner knew about potentially infringing uses and did nothing about them.   Federal registrations have very specific care and feeding requirements as well. After 5 years of registration, you'll need to file a renewal application to keep the registration alive.  At that same time, you can file a declaration of "incontestibility", which will protect against challenges to the propriety of the registration of the mark.  Every 10 years after the first renewal, you also have to file a form swearing you're still using the mark in order to keep it alive.

 

 

COPYRIGHTS

 

Copyrights are one of the most prevalent, and most misunderstood, areas of intellectual property.   People will often talk about copyrighting their company name, when they really want a trademark, or about copyrighting their new idea, when they really want a patent.  What copyrights actually do is protect original expression, be it literature, sculpture, software, choreography, lyrics, or music.  That means you can't copyright an idea, only a particular expression of it.  In effect, copyright is much more potent than that description might make you think, since the government isn't in the business of judging what is sufficiently artistic to be literature or sculpture, and errs on the side of inclusion.  That means anything, from a doodle on a cocktail napkin, to a pile of sticks you made in your yard are arguably protected by copyright.  In effect, anything written or made in a tangible medium is copyrighted.  Yes, copyrighted, not just copyrightable.  Under international treaties, copyright must not place any formal barriers between an author and legal protection, so copyright immediately attaches upon the creation of just about everything that involves more creativity than the phone book's white pages.

 

Copyrights can become significant assets of a business that engages in much written work.  Copyrights will prevent your competitors from lifting text and pictures describing your products that you've created, and will prevent you from making unlicensed use of the work of others. 

 

 

PATENTS

 

Patents are probably the most familiar variety of intellectual property, after all, everybody is familiar with the phrase "Pat. pending" that we see on commercial products all around us.  Patents are the strongest variety of intellectual property because they go so far as to wall off an idea, not just an expression of an idea.  Patents protect inventions, discoveries, methods of making things, methods of doing things, and sometimes methods of doing business itself.  Patents are granted by the U.S. Patent and Trademark Office, as well as by national patent offices in many other countries. In order to be eligible for patent protection, an invention must meet three criteria: it must be novel, it must be non-obvious, and it must be useful.  The examiners at the PTO are charged with determining if an invention that is submitted for in a patent application meets these criteria.  There are many complicated nuances about what is patentable and what is not.  This area of legal practice is so specialized that it is walled off from most practicing lawyers, reserved for the few who have a scientific or engineering background in addition to a law degree.  If you think you have an invention or improvement to an invention that  might be patentable, the best way to look into patenting it would be to consult with one of these specialized lawyers.