Entrepreneur’s Introduction to Intellectual Property

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WHAT IS INTELLECTUAL PROPERTY?
Intellectual Property refers to creations of the mind or conceptual information such as inventions, brand names or creative works. As opposed to other property rights such as real estate, money or tangible goods.

THERE ARE FOUR PRIMARY TYPES OF INTELLECTUAL PROPERTY:

1. Copyright
2. Trademark
3. Patent
4. Trade Secret

COPYRIGHT

WHAT DOES COPYRIGHT PROTECT?
Copyright protects original creative works such as books, music, photography, illustrations, architectural plans, choreographic works, and computer programs. Copyright protection is available to both published and unpublished works

HOW IS COPYRIGHT PROTECTION CREATED?
Copyright ownership is automatically created as soon as the work is fixed in a tangible medium, meaning as soon is the words are written, a picture is painted, code is typed, etc.

HOW LONG DOES COPYRIGHT PROTECTION LAST?
In works created after January 1, 1978, copyright protection lasts life of author + 70 years or in the case of a work-for-hire 95 or 120 years depending on the nature of the authorship.

WHY SHOULD YOU REGISTER YOUR COPYRIGHT?

  • Registration is required to bring a lawsuit.
  • Creates a public record of ownership
  • Recover more money in a copyright lawsuit. If registered within 3 months of creating the work or prior to an infringement of the work, then the plaintiff/owner of the copyright can recover a lot more money in the form of statutory damages. Statutory damages in some instances can be as large as $150,000.00 plus attorney’s fees. If your copyright is not registered in a timely manner, then you may be limited to ‘actual damages’ which are harder to prove and may be very small.
  • Easier to stop pirated works from being produced. For example, you can provide the copyright registration to US Customs to stop illegal copies of the work from being imported.
  • Easier to transfer ownership. The registration certificate is evidence of ownership, and this makes it easier to transfer to another person, such as in a will.
  • Business, Licensing, & Royalty Opportunities. Registration can provide additional assurance that you do in fact hold the copyright and have the ability to license or sell the copyrighted work. In the case of musical works, registration allows you to collect royalty payments.

TRADEMARK

WHAT DOES A TRADEMARK PROTECT?
Trademarks protect names, words, slogans,logos, or almost anything else that a business or brand uses to distinguish itself from other brands. A trademark assures consumers of a certain quality. For example, the Nike “swoosh” trademark assures customers they are buying a certain quality of running shoe.

HOW IS TRADEMARK PROTECTION CREATED?
Trademarks are where law and marketing come together. The right to a trademark is created by actual use. By being the first person to use the trademark in connection with the sale of goods or services, you can acquire trademark rights. While it is not required to register a trademark with the United States Patent and Trademark Office, there are significant benefits to registration.

HOW LONG DOES TRADEMARK PROTECTION LAST?
Potentially forever. It is possible to own a trademark forever, but you have to continually use the mark in commerce to distinguish your goods and take active steps to protect your trademark from infringers and copycats. Otherwise, a trademark is deemed to be abandoned or inactive.

WHY SHOULD YOU REGISTER A TRADEMARK?

  • National vs Local Protection. Registering a trademark provides nationwide notice of ownership, which preventing others from claiming use of the mark in ‘good faith.’
  • Prevent registration of and discourage others from using confusingly similar remarks. For example, McDonald’s could stop a fastfood restaurant from using a simlar name such as “McDowells” or using the ‘Golden Arches’ in its advertising.
  • Right to sue in federal court and register with US Customs. In federal court treble (3x the amount) and statutory damages can be awarded to infringers of federal trademarks. This can be significantly higher than actual damages.
  • Proof of validity. Trademark rights are earned through usage, but only if it is a valid mark. If you have an unregistered trademark and involved in court case, then the burden is on you to prove you have a valid mark. There is no way for anyone, even a trademark attorney, to be 100% certain beforehand on whether an unregistered trademark is valid unless it is registered with the USPTO. With a registered trademark the registration itself is proof that the trademark is valid and that you are the national owner.
  • Provides a basis for foreign registration, letting you protect your trademark worldwide.

HOW TO CHOOSE A TRADEMARK

Trademark Search. Before you invest significant resources into developing a brand, a proper trademark search is a must. Defending a lawsuit, destroying inventory, and being forced to choose another brand name are all things to be avoided. Trademarks are granted on a first come-first serve basis, and you need to determine if another party has prior rights to the trademark. The results of trademark search should be reviewed by a trademark attorney.

Some Trademarks are Better than Others. The more distinct and unique a trademark, the stronger protection you will have. Examples from strongest to weakest trademarks:

Strong Trademarks:

  • A Coined Mark is the strongest. It is a made-up word, and the most likely to be accepted for registration with the USPTO. Examples: Kodak, Yahoo,
  • An Arbitrary Mark is close in strength behind coined mark. The brand name is a real word, but is unrelated to the product. Example: Camel Cigarettes.
  • A Suggestive Mark is not as strong as a coined or arbitrary mark, but is somewhat distinct from the actual product. However, with a little thought by the consumer, they can make the connection. Example: Coppertone

Weak Trademarks:

  • A Descriptive Mark will offer some protection, but they are often difficult to register and more easily infringed upon. Example: Men’s Wearhouse, Computer Magazine.
  • A Generic Mark will offer no protection and most likely will be rejected by the USPTO.

 

PATENT
WHAT DOES A PATENT PROTECT?
Two types of patents: Utility and Design Patents. Utility patents are typically granted to inventions that are new or have improved in non-obvious way a prior invention. For example, machines, processes, or chemical compostions.

Design Patents are granted for new, original design that does not affect the article’s function. For example, Burberry has a design patent for its trench coat.

HOW LONG DOES PATENT PROTECTION LAST?
Utility Patent last 20 years. Design Patent 14 years.

WHY SHOULD YOU REGISTER FOR A PATENT?
Patents give owners a monopoly to prevent others from making, selling, or importing their patented invention or design. Unlike Copyright and Trademark, the law offers no default protection.

TRADE SECRETS
WHAT IS A TRADE SECRET?
A trade secret is any type of confidential information that gives your business an advantage over its competition. For example Coca-cola’s ‘secret formula’ or KFC’s secret blend of herbs and spices.
Unlike other types of Intellectual Property, trade secrets are not public, they are…secret!

HOW TO PROTECT TRADE SECRETS?
Assess what needs to be confidential. Use non-disclosure agreements and confidentiality provisions as necessary in contracts. If your trade secret is ever stolen, you will need to outline to the court the steps you took to keep the information secret.