Understanding IP – An Overview of Patents, Trademarks, Copyrights and Trade Secrets for Non-Lawyers
An understanding of basic intellectual property law is essential for every corporate leader or entrepreneur. If your products and concepts are not properly protected, other companies may infringe on your unique designs. You also run the risk of inadvertently coming too close to the specific features protected under another company’s patent, trademark, copyright, or trade secret, opening yourself or your company to litigation.
The success of today’s world economy heavily depends on the identification and protection of intellectual property assets and the effective enforcement of intellectual property laws. It’s estimated that IP represents one-third of the total value of U.S corporations, upwards of $5 trillion.
CEOs, executives, and managers don’t need to know every detail of IP law, but a familiarity with the basic concepts pertaining to the four main categories of intellectual property rights will give you actionable insights to help you reach informed decisions regarding to your intellectual property.
1. Patents Prevent Theft of Original Concepts
A patent is a government grant of a property right that gives you as an inventor exclusive rights over an invention and bars others from making, selling, using, or importing your invention.
An invention can be a product, material, machine, or process that provides a solution to a problem or offers a new way of accomplishing an existing function or process. You can obtain patents for a broad range of products including tools, instruments, machines, systems, methods, formulations, and even plants and animals.
An invention must meet at least three requirements to be patentable.
- Novelty: For your invention to be patentable and qualify for protection, it cannot be available to the public anywhere in the world at the time of application for protection.
- Non-Obviousness: The invention must also not have been obvious to an ordinary person at the time of invention.
- Utility: For your invention to be patentable, it must be useful for a particular purpose.
One potential drawback of filing for a patent is that part of the application process involves detailing the process or product you want to protect. This makes your invention public, and while a patent offers legal recourse in the event of misappropriation, any exposure carries risk.
2. Trademarks Protect Brand Identity
A trademark is a design, symbol, phrase, word, or any combination of these that identifies and sets apart a specific service or product from the rest in the marketplace. The McDonald’s golden arch is one classic example of a trademark. Symbols, phrases, names, mascots, and lyrics may also be trademarked.
The term “service mark” is used in place of a trademark when referring to a service rather than a product.
Branding is essential in today’s economy, so it’s wise to trademark the features that help potential customers and clients recognize your business.
Keep in mind that there are some marks and terms that are considered unacceptable for use as trademarks for public policy reasons. They include:
- Official government marks, e.g., flags, coat of arms, national emblems, etc.
- Deceptive marks
- Marks that are against public order, obscene or morally offensive
Consulting an IP specialist to perform a search of existing trademarks and file a registration can be one of the most critical steps you can take to ensure that your brand stands out from your competitors.
3. Copyrights Cover Literary and Artist Creations
A formal copyright protects literary, artistic, or musical material by awarding the originator or an assignee the exclusive right to print, publish, perform, film, or record material that has been established in a tangible manner.
Copyright protection does not depend on any application formalities or procedures. Instead, any creative work is considered protected by copyright as soon as it is created as long as it is both fixed in a tangible form and original.
Some of the works protected by copyright include:
- Musical works
- Dramatic works
- Computer programs
- Sound recordings
- Architectural works
- Motion pictures and other audio-visual works
Note that copyright protection only covers the particular expression of an idea—not the idea itself.
Rights Afforded by a Copyright
As a general thumb rule, the author and owner of the copyright is usually the person who created the work. S/he has the sole and exclusive rights to do the following:
- Copy the work
- Change the work
- Distribute the work publicly
- Perform or display the work
- Authorize others to do any of the above
If you have reason to believe original material has value that may make it vulnerable to plagiarism by another party, formally registering the work within five years of its creation is advisable. This makes it eligible for statutory damages and attorney fees if litigation is successful.
4. Protecting Trade Secrets is Essential for Long-term Business Success
A trade secret is confidential information that has commercial value. Trade secrets can be described as any information that:
- Is secret: The information is generally unknown or not readily accessible.
- Has commercial value: The information gives a business an edge over competitors.
- Has been kept private: The information has been subject to reasonable procedures meant to uphold secrecy.
One of the most popular trade secrets is the Coca-Cola formula for making soft drinks. The formula is kept in a guarded vault and is privy to only a few persons within the company. Trade secrets can also be intangible processes, like Google’s search algorithm, or the process by which The New York Times Bestseller List is compiled.
Other examples of trade secrets may include
- Supplier/customer lists
- Financial data
- Manufacturing processes
- Pricing information
Trade secrets are the lifeblood of a business. If an employee, business partner, or vendor misappropriates a trade secret, not only current profits, but the company’s future could be in danger. The Defend Trade Secrets Act provides for recovery of damages and attorney fees in cases where willful and malicious misappropriation or bad faith is proven. Most states also have their own versions of the Uniform Trade Secrets Act which applies in these types of cases.
With these concepts in mind, CEO’s can better understand the nuances, pros, and cons of different forms of IP protection so that they can, in consultation with an IP expert, make decisions about how to best protect their valuable intellectual property.
Dilworth IP offers complete services for protecting your business’ intellectual property rights and assets. Contact us. Our skilled and experienced team will be happy to assist you in determining the best methods for protecting your business’s intellectual property resources.