By: Pranita Dhungana
How many Intellectual Property (“IP”) markers can you spot around yourself?
I see the DELL icon on my laptop, my employer’s logo on my water bottle, the Nike checkmark on my socks, Dove chocolates, the Apple logo on my iPad, and 21 more on my desk alone.
IP is a critical business asset. The examples above alone illustrate that one of the functions of IP is to identify and distinguish the brand. For example, I didn’t buy just any tablet – I specifically chose an iPad because of the qualities and features associated with Apple.
IP protection should be a consideration right from the beginning of your business to protect your intangible assets from competitors, as well as to create a distinct brand identity. Here are the four main types of IP, and how they interface with business:
1. trademark
A trademark is a word, logo, or package design that identifies the source of the goods or services, such as the examples above. Companies invest significantly on advertising to create a unique and recognizable brand identity, and trademark is a tool to reinforce and protect that.
In addition to identifying your brand, trademarks also provide legal protection against counterfeiting. For example, another tablet manufacturer cannot use the Apple logo because Apple has the exclusive rights to its trademarks, which allows Apple to pursue legal remedies against counterfeiters. Such protection bars competitors from benefiting off of your brand image, and ensures that your consumers are not misled.
The only requirement for trademark protection is actual use, for example, in advertising or packaging. However, national registration is still desirable because it provides nationwide protection, while a non-registered trademark provides protection only within its geographic area of use. Additionally, state registration can also be useful as it provides notice of your trademark to local businesses.
Among other requirements, a registrable trademark must be unique and non-misleading. In addition, a trademark must not simply describe the goods or services. For example, “The Bookstore” would not be a registrable trademark for a bookstore.
💡New business owners should consider trademark registration requirements when picking a company name and logo to create a unique and legally protected brand identifier.
2. copyright
Copyright protects artistic and literary works like books, movies, and music. In the business context, it also protects original and creative works like software, video games, documents, and marketing materials. A copyright owner has the exclusive rights to reproduce, distribute, display, and derive from their copyrighted work. Such exclusive rights allow you to issue a license to others to use your work. Depending on your business, a licensing fee can be a lucrative source of income. A common example is software license.
Copyright protection does not require national registration. Copyright exists from the moment an eligible work is created. For example, a book enjoys copyright protection from the moment it is written. However, registration is desirable because it allows you to sue infringers, and makes certain monetary damages available in case of infringement. In addition, registration makes licensing the work easier.
A copyrightable work must be minimally creative and not be copied from an existing work. Additionally, copyright protects the particular expression, and not the underlying idea. For example, if you write a book on bee-keeping, you have exclusive rights to that book, but not to the idea of bee-keeping.
💡New business owners should register copyrights for original, creative works to preserve exclusivity in such works, and to make licensing easier.
3. patent
Patent protects inventions, designs, and asexually reproduced plants. Some famous patented inventions include the electric lightbulb, Apple’s first personal computer, GPS technology, CRISPR gene editing, and the shaving razor.
Unlike with trademarks and copyrights, patent protection is harder to obtain, is more expensive, and can take a few years. A patent is granted by the U.S. government only after a rigorous, technical examination of a patent application to ensure that the invention meets all the patentability requirements. A patentable invention must be man-made as opposed to natural, new, useful, and not an obvious combination of existing inventions.
A patent gives you a limited monopoly right over your invention, meaning that others cannot make, use, or sell the patented invention during that time. Patenting your product will ensure an exclusive market for a limited time, during which your product enjoys zero competition. In addition, if you have ever seen Shark Tank, you must already know that patents also enhance your business’s credibility. This is likely because the rigorous patent examination process gives the impression of government approval. Speaking of Shark Tank, the limited exclusive right to sell the invention can also attract potential investors.
💡New business owners should patent their inventions as soon as possible to obtain a limited monopoly over the market, enhance credibility, and attract potential investors.
4. trade secret
Trade Secret, as the name suggests, protects secret business information. It protects almost any information that is valuable because it is not known and is sufficiently secret, such as formula, process, software, recipe, customer list, budget plan, marketing data. The two most famous trade secrets are Google’s search algorithm and Coca-Cola’s recipe.
Trade secret protection requires only that the information actually be secret. The obvious benefit of a trade secret is that your competitor cannot access that information to gain a competitive advantage over you. Ask yourself, do you use a search engine other than Google’s?
💡 New business owners should take affirmative steps to keep secret business information confidential because such information can obtain trade secret protection, thereby providing a competitive advantage.
I hope this blog has helped you think about your business’s IP needs. Because IP is a crucial business asset, please work with a lawyer to better understand the specific registration requirements and processes.
💡Miscellaneous IP considerations: It is important to periodically assess whether your business is infringing on others’ IP. Additionally, if you hire employees, their employment contracts would ideally transfer IP rights in any company-related work that they create back to the company.
This post has been reproduced and updated with the author’s permission. It was originally authored on February 7, 2023 and can be found here.
Sources:
https://www.lexology.com/library/detail.aspx?g=88d72fd7-c1ca-4da3-bf0b-55a63c567872
https://www.uspto.gov/ip-policy/trade-secret-policy
https://www.wipo.int/tradesecrets/en/
https://info.vethanlaw.com/blog/trade-secrets-10-of-the-most-famous-examples