What Every Business Owner Should Know About Intellectual Property
Intellectual property, or “IP,” can be one of the most valuable assets of a business. Identifying and protecting your IP is essential to maximizing its value and ensuring its longevity. The primary areas of IP are trademark, copyright, patent and trade secrets. Read on to learn the basics of IP under US law, and steps every business owner should consider taking to protect its IP assets.
Trademark A trademark is something that identifies the source of particular goods or services. Trademarks can be words, designs, logos, color, packaging, sounds and scents. Examples include the term Amazon, the Nike logo, the Coca-Cola bottle shape, and the MGM roar. In the United States, common law trademark rights arise from use. However, there are important benefits to obtaining a federal registration including a presumption of validity and nationwide rights. Trademark protection is relatively inexpensive, and the rights can last indefinitely.
Trademark owners can prevent others from registering or using marks that are likely to cause confusion. Enforcing a trademark is very important to prevent it from becoming weaker. See our Trademark FAQs for more information.
Copyright Copyright protects original expression that is fixed in a tangible form. Examples include books, paintings, music, and computer software. While increasingly popular, works generated solely by artificial intelligence (“AI”) do not qualify for copyright protection. No registration is necessary for copyright protection to exist. However, registering a work with the Copyright Office is a prerequisite to litigation over a United States work. Additionally, registration provides significant benefits, including the right to seek attorney’s fees and statutory damages. These benefits often provide important leverage in infringement situations.
Copyright owners possess the exclusive right to reproduce the work, prepare derivative works, sell and distribute copies, and publicly perform or display the work. Copyright owners can also license these rights to others. The test for infringement is whether an accused work is substantially similar to the original. Copyright registration is inexpensive and generally lasts for the life of an author plus an additional 70 years. Works for hire, anonymous and pseudonymous works are protected for 95 years from first publication or 120 years from creation, whichever is shorter.
Patent Patents protect new inventions, including processes, systems, products, designs and plants. The subject of the patent must be new and useful and not obvious to a person of ordinary skill in the art at the time the invention was made. To obtain a patent, the application must include a written description that enables others to make and use the claimed invention. Patent rights do not exist until a patent is granted by a government office. In the United States, patents are granted by the Patent and Trademark Office (“PTO”).
There are three different types of patents: utility, design and plant patents. Utility patents cover new processes, machines, manufactured elements, or compositions of existing matter. Examples include pharmaceuticals, engines, computer hardware, and in some cases business processes and software. Design patents cover ornamental designs embodied in a manufactured article. Examples include decorative designs on jewelry, furniture, packaging, and product designs. Plant patents cover any new and distinct variety of plant that has been invented or discovered and asexually reproduced by the inventor provided that the plant is not a tuber propagated plant or a plant found in an uncultivated state.
Patents are typically the most expensive form of IP to obtain given the costs and fees associated with preparing, filing and prosecuting a patent application before the PTO. Prior to filing a patent application, a prior art search may need to be conducted to gauge the patentability of the new invention, leading to additional costs. Patent owners have the exclusive right to prevent others from making, using, selling or importing their invention into the United States for a set period of time. The duration varies by the type of patent and date it was filed; currently, utility patents last 20 years from the date the application was filed.
Trade Secret A trade secret is something that has economic value by virtue of being generally unknown. To be protectible, steps must be taken to maintain the secret, such as through the use of non-disclosure agreements, locks, passwords, etc. Examples include the Coca-Cola formula, Google’s search algorithm, and the recipe for making Thomas’ English Muffins. No registration is necessary for trade secret protection, and it can last indefinitely, provided secrecy is maintained. Misappropriation of a trade secret occurs when information is accessed by improper means or used without authorization.
Conclusion Intellectual property is a valuable asset for businesses large and small. For help protecting your IP assets, contact us.
Nancy J. Mertzel
Mertzel Law PLLC
5 Penn Plaza, 19th Floor New York, NY, 10001