Author: Coryn Hubbert

Protecting Your Brand: What Every Entrepreneur Should Know About Trademarks

When starting a small business, it is easy to spend more time focusing on research and development of your product than on your brand. However, it is important to remember that you cannot have a successful business without having exclusive ownership of your brand.

Imagine that after countless hours spent on research and development, you announce your new company to the world using the brand name and logo that you designed. In doing this, you created a connection in consumers’ minds between the product or service you are offering, and your brand name. Now imagine that another business, offering a similar product or service, uses a similar name or logo to yours. This would be infuriating and could potentially undermine your company’s growth. However, this situation cannot occur with trademark protection.

What is a Trademark?

A trademark is a word, phrase, or logo that identifies the source of goods or services and differentiates the goods made or sold by a company from those made or sold by another company. If you properly obtain trademark protection of your business name and logo, this prevents others from legally using the name in a confusingly similar way. However, if you do not secure trademarks, the other company may be well within its rights to use the logo, even if it is similar to yours.

Going beyond the legal definition, trademarks are a symbol of your business’s identity. The name and logo that you create for your business will help to identify your products and services and will ensure that consumers will be able to distinguish your offerings from those of competing businesses. Even further, when the consumer thinks of your business, they will automatically begin to think of your logo as you gain recognition in the marketplace. What do you think of when you think of Nike? It is likely that the “Swoosh” logo popped into your head immediately, and that is what a good trademark can do for your business.

Trademark Registration and Exclusive Rights

Registration of a trademark is not a requirement for protection; however, failure to register makes it possible for a competing business to claim the mark for their own use. Further, if you fail to do a trademark search prior to marketing your brand name, it is possible that the brand name you created is already being used by another company, which could put your company at risk of an infringement suit. Conducting a trademark search and registering your trademark with the USPTO can prevent both of these problems, while also providing you with other benefits.

Trademark registration puts others on notice that you hold the rights to your mark and provides presumptive rights in the event you need to enforce your mark against others who may be infringing upon your trademark rights. Further, after five years of continuous use, the mark can obtain incontestable status, meaning that the grounds on which the mark’s validity can be contested are limited. Trademark owners may also request customs officials to bar importation of goods bearing infringing marks.

How to Register a Trademark and Maintain Registration

To register a trademark in connection with your goods or services, the mark must be used in commerce, no other mark can have priority, and the mark must be sufficiently distinctive. Priority means that the earlier owner of the mark can prohibit later users from using the mark in confusingly similar ways. In order to be distinct, the mark cannot merely be a generic term or a description for the good or service being sold. The primary significance of the mark in the minds of the consuming public must be the producer, not the product.

Prior to registering your mark, it is important to make sure that your mark is available. You can do this by completing a TESS search through the USPTO. If you do not have an attorney assisting you, it is recommended that you use a trademark search company to assist you in your search. If you find that the mark you intend to use is already being used for similar products or services, you will likely need to brainstorm other options for your business name.

If your chosen name is available, and your mark meets the requirements, you can then proceed by filing an application to register the mark with the USPTO. You may file with the help of a third-party trademark filing service or file on your own with the help of your Secretary of State. The application requires basic information about yourself/your business and the mark, such as owner name and address, a description of the mark, the types of goods and services that the mark is used for, and various dates of use for the mark. There is also a required filing fee.

Once the application is filed, a trademark examination attorney will review the application and either request further information in the form of an “Office Action”, or they will publish the mark in the Official Gazette. If no oppositions to the mark are filed within 30 days, the USPTO will then register the mark on the Principal Register.

Trademark registration provides a ten-year term that can be renewed indefinitely if the mark continues to be used in commerce. There are also periodic filing requirements and fees to maintain the registration. Once your trademark is registered, be sure to maintain the mark by continuing to use it in commerce and providing notice to others that the name or logo is registered. Notice of a registered mark can be shown using the ® symbol.

Key Takeaways

Protecting your brand with trademarks can make a big difference in your business. It is important to register your mark as soon as you can to ensure that it is protected. This post provides some basic information about trademarks, but if you have more questions, the USPTO serves as a great resource to seek more information.

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Notice and Takedown: Using the DMCA to Protect your Copyrights

Copyright law protects artistic works, but it can also protect much more, such as marketing materials, computer software, and certain information on a company webpage. The versatility of copyright law makes copyright protection a useful tool for entrepreneurs, and the Digital Millennium Copyright Act (“DMCA”) provides entrepreneurs with a process to prevent web-based copyright infringement.

What is Copyright? What is the DMCA?               

Copyright law protects original works of authorship as soon as the author fixes the work in a tangible medium of expression that is at least semi-permanent. Items that are copyrightable include but are not limited to: literary works, music, pictures, and movies. Additionally, a copyrightable work does not need to be registered with the U.S. Copyright Office to receive the legal protections of the DMCA.

The DMCA is an extension of copyright law that clarifies digital media rights and creates the notice and takedown system, which allows copyright owners to inform online service providers about infringing material so it can be taken down. To incentivize service providers to participate in the notice and takedown system, service providers are granted immunity from certain infringement liability, provided they participate in the notice and takedown system and abide by other conditions.

Notice and Takedown System

Imagine you posted copyrightable material on your company website, such as a video describing your product or instructions on how to use the product. Now imagine that your direct competitor took that material, changed it slightly, and posted it on their own website. This is upsetting, and it is also copyright infringement. Thankfully, the DMCA’s notice and takedown provisions create a process that allows you to send a takedown notice to a service provider, requesting the provider to remove the infringing materials. A service provider can be an internet service provider (e.g., Comcast), website operator (e.g., eBay), search engine (e.g., Google), web host (e.g., GoDaddy) or other type of online site-operator.

Before sending a takedown notice, it is important to conduct a good faith investigation of the infringing activity to ensure that your rights are being violated and that the activity does not constitute fair use of the material. If a copyright holder neglects to consider fair use before sending a takedown notification, they could be liable for damages. Further, you will want to ensure that your content is copyrightable, or it will not be protected by the DMCA. Once you determine that your rights are being violated, you can proceed with drafting your notice.

Step One: Determine Who to Send the Notice To

Takedown notices are sent to service providers, rather than the subscriber, user, or other person who is ultimately responsible for posting the infringing material. This requires you to determine which service provider is hosting the website that contains the infringing material. If you are unsure about who the web host of a site is, you can look up the IP address of the site with a free online tool, such as Domain Tools or Whois search.

Step Two: Determine Where to Send the Notice

Many service providers offer easy-to-use online tools to submit claims directly to the service provider through an online DMCA takedown form. Alternatively, the Copyright Office has created a directory of designated agents where you can look up the service provider to determine where to send the takedown notice.

Step Three: Drafting the Notice

There are multiple elements that must be included in a takedown notice. If these are not included, the service provider may refuse to take down the material. These elements include:

  • Signature of the copyright owner or the person authorized to act on their behalf.
  • Identification of the copyrighted work which was infringed, the infringing activity, and the location of the infringing activity.
  • Contact information of the notice sender, including an email address.
  • A statement that the notifier has a good faith belief that use of the material is not authorized by the copyright owner, its agent, or the law.
  • A statement, made under the penalty of perjury, that the information in the takedown notice is accurate and that the notice sender is authorized to act on behalf of the copyright holder.

Step Four: Send and Wait

Once the notice is sent, the service provider will notify the user responsible for the infringement and expeditiously take down the material. This user can then choose to send a counter notice or do nothing.

Counter Notice

If you or another user receive a takedown notice, and in good faith believe that the activity is not infringing, a counter notice may be filed with the service provider. The counter notice explains why the user disagrees with the copyright owner and must contain most of the same elements included in the takedown notice: signature, identification, and contact information. Additionally, the counter notice must include a statement of good faith belief that the infringing material was removed as a result of mistake or misidentification. Last, the counter notice must include consent to be sued in Federal District Court in the district in which your address is located.

After receiving a counter notice, the service provider is obligated to forward that counter notice to the party who sent the original takedown notice. Once the service provider forwards the notice, it must restore the material within 10-14 business days, unless it receives notice that the copyright owner filed a lawsuit against the alleged infringer.

Key Takeaways

Protecting your copyrights as an entrepreneur is important business. If you notice that someone is infringing on your copyrighted material online, it is important to act quickly to ensure that this infringement is stopped in its tracks. The DMCA notice and takedown process provides a quick and relatively easy method to deal with online infringement. This post provides a simplified overview of the process, but if you have any more questions, the U.S. Copyright Office serves as a great resource to seek more information.

 

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Patents vs. Trade Secrets: Choosing the Best Method to Protect your Intellectual Property

A company’s intellectual property is its number one asset, and as such, choosing the method to protect it can be one of the most important business decisions an entrepreneur will make in the start-up phase. Two options for protection are patents and trade secrets.

Utility Patents

Patents are contracts between the patent owner and the government. In exchange for the patent owner’s full disclosure of the invention, the government grants the patent owner monopoly rights for 20 years from the date of filing. Once these rights expire, the invention falls into the public domain, where anyone is free to utilize it.

Requirements

There are four legal requirements for patentability: it must be useful, patentable subject matter, novel, and nonobvious. Patentable subject matter includes machines, processes, methods of manufacture, or compositions of matter, and excludes laws of nature, natural phenomena, abstract ideas, and business strategies.

Once these four requirements are met, the invention must be fully disclosed to the United States Patent and Trademark Office (“USPTO”) to receive protection. A full written disclosure to the USPTO requires the inventor to provide a written description of the invention that will enable an expert in the field to make the invention without undue experimentation.

This is only a brief explanation of the requirements for an invention to be patented. If you wish to choose a patent as the method for protecting your IP, you will need to consult with an attorney to begin the filing process.

Pros

Safeguards: Safeguards for protection of patents are considerably stronger than trade secret safeguards. Patents grant their holders the exclusive rights to make, use, sell, offer to sell, and import a product or process for 20 years. If independent invention occurs (through reverse engineering or otherwise), the original product, formula or process still enjoys patented protection.

Worth the Investment: Patents provide strong protection against loss of a company’s investment in technology, particularly when the company intends to continue developing and building upon the patented technology. Additionally, because patents are property rights, they can be bought, sold, or licensed, thus enhancing their value as revenue sources to the company.

Cons

Cost: Patent applications are complex legal documents that require an attorney’s assistance through each step of the process. Further, once the patent is granted, the owner must pay three separate maintenance fees.

Public Disclosure: Patents require companies to disclose their inventions publicly, and in return, they provide protection for twenty years. However, once the twenty years is up, your invention is public knowledge, and can be used by any of your competitors.

Trade Secrets

A trade secret is information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value by remaining unknown and not being readily ascertainable by proper means.

Requirements

To retain protection, the trade secret must be subject to reasonable efforts under the circumstances to maintain its secrecy, which could mean securing relevant documents, using encryption, having employees sign nondisclosure agreements (“NDAs”), and only allowing employees to know the information on a need-to-know basis.

Pros

Duration: Trade secrets can be protected indefinitely. One example of this is Coca-Cola’s secret recipe, which they chose not to disclose through a patent and remains a trade secret.

Cost: Trade secrets do not need to be filed or approved, meaning they do not require filing fees or legal fees. The secret must simply meet the requirements of the statute, and then it immediately becomes a trade secret.

Advertising: People inherently want to know that which is not meant to be known. People naturally gravitate toward the hidden and mysterious, providing intrinsic value in products with a secret component.

Subject Matter: Trade secrets can be used to protect things that are not considered to be patentable subject matter. This allows things such as customer lists and pricing information to be protected as a trade secret in some instances.

Cons

Less Protection: Trade secret protection is inherently riskier. While the duration of a patent is much shorter, its protection is much stronger than that of a trade secret. Trade secrets only protect against unlawful breaches. They do not prevent parties from legitimate duplication efforts, such as reverse engineering, to learn of the secret independently. Alternatively, competitors could develop their own version of the trade secret and could even file a patent to claim an exclusive right to it, effectively shutting out the inventor.

Risk of Unintentional Disclosure: Using your trade secret in business can lead to unintentional disclosure that results in a loss of protection. Trade secret protection can be lost through independent discovery, reverse engineering, discovery under a license from the owner, observation of an item in public, through literature, or a failure to have company employees sign NDAs to ensure the secret is maintained.

Choosing the Right Approach

The decision between using a patent or a trade secret involves many considerations and an analysis of a multitude of factors.

While they may be expensive and time-consuming to secure, Patents provide extremely effective protection for a limited period: a company with exclusive use of a product or process will command the market for 20 years.

While a well-kept trade secret could be secret indefinitely, any person who lawfully learns of the secret may use it as their own. A patent may only last 20 years, but the protection is stronger during that era: independent invention is no defense in a patent suit. However, a trade secret could be used to protect anything not considered to be patentable subject matter.

If the requirements for both options are met, a company should investigate two factors in making their decision:

  • Is 20 years a sufficient period of protection?
  • Is a competitor likely to reverse engineer or independently reproduce the product during that period?

It is important to think long term in making the decision between a trade secret and a patent. These pros and cons should assist with your determination.

 

 

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