The beginning of the year is a good time to review your clients’ intellectual property needs. The first and most important thing to do is to determine what intellectual property the client has. Once the intellectual property has been identified, the means of protecting it can be analyzed and a plan for establishing protection set up.
What is Intellectual Property?
Almost anything can constitute intellectual property. IP may fall into one or more of the following categories: inventions that can be patented, expression that is copyrightable, names or logos that are trademarks, and information that is a trade secret.
A patent protects an invention. There are three kinds of patents: utility, design, and plant. A utility patent covers a functional invention, of which there are five categories: articles of manufacture, machines, compositions of matter (e.g. chemical compounds, genes, and non-natural plants and animals), processes (or methods, including computer software and business methods), and improvements of any of the above. A design patent covers a new, ornamental (non-functional) design for an article of manufacture, such as a fork, doorknob, or a chair. A plant patent covers plants that are asexually reproduced (i.e., plants that can be reproduced without seeds, such as by budding or grafting). Certain things are not patentable: pure mathematical algorithms, printed matter, natural compounds, natural living organisms, and scientific principles.
A copyright protects an original work of authorship fixed in a tangible medium. This includes books, movies, musical compositions and works of arts. Neither ideas nor functional works, such as procedures, systems, methods, and principles, are protectable by copyright.
A trademark protects a name, phrase, or logo that indicates the source of the goods or services. A sound or color may also be protectable as a trademark. Trade dress is similar to trademark and protects the overall look and feel of something, such as the interior decor of a restaurant. Trade dress is protectable as long as it is not functionable.
A trade secret is information that has independent economic value from being maintained as secret and is the subject of reasonable efforts to keep it secret. Almost any kind of information can constitute a trade secret, such as a formula, method, program, process, or composition.
How is IP Protected?
Patentable inventions are protected by United States patents issued by the United States Patent and Trademark Office (“PTO”). Patent law is federal law, as set forth in Title 35 of the United States Code and Title 37 of the Code of Federal Regulations. (Most foreign countries also protect patentable inventions and have laws similar to those of the United States.) In order to obtain a patent, the inventor, or its assignee, must file a patent application, which is examined by the PTO. If the application satisfies the requirements for a patent, the PTO will grant a patent. For a utility patent, the invention must be useful, novel (i.e., new) and not obvious over what has been done before (the prior art). The written application must also meet certain specific requirements.
Copyrightable works are protected as soon as the original expression is fixed in a tangible medium. In order to be original, the work must be independently created. A copyright can be registered with the United States Copyright Office. Like patent law, copyright law is exclusively federal law. It is set forth in Title 17 of the United States Code.
Trademarks are governed by both federal law (the Lanham Act, at Title 15 of the United States Code) and state law. Trademark rights arise from actual use of the mark in commerce or from the filing of an application with the PTO stating an intent to use the mark. A trademark may be registered under federal law and under most state laws as well. To be registrable, the mark must distinguish the goods or services of its owner. The strongest marks are those that are fanciful or arbitrary. Marks that are suggestive are also strong, while marks that are merely descriptive are not registrable unless there is also secondary meaning (association by the public of the mark with a single source). Generic marks are not protectable.
Trade secrets are governed by state law. Almost all states have adopted the Uniform Trade Secrets Act, which codifies common law trade secret protection. Virtually any kind of information can be kept as a trade secret, although the most common are financial information, technical know-how, and customer needs. No registration process exists; rather, the information must be kept secret in order to remain a trade secret.
What Rights are Protected?
A United States patent grants its owner the right to exclude others from making, using, selling, or offering to sell the patented invention in the United States, or importing the invention into the United States. These rights are called “exclusionary rights.” A patent does not confer these rights on its owner, however, as an invention may be patentable but still infringe another patent. Both utility and plant patents last 20 years from the date of filing of the patent application, while a design patent lasts 14 years from the date of its issuance.
A copyright owner has the exclusive rights to reproduce the work, prepare derivative works, distribute copies, perform the work, and display the work. A copyright protects its owner from the copying or making of a substantial similar work by another. Copyright protection generally lasts for the life of the author plus 70 years, with some exceptions.
A registered trademark gives its owner evidence of ownership and of priority of use. The owner of a registered mark has the right to prevent others from using confusingly similar marks in connection with similar goods or services. The protection of a registered mark may last indefinitely if the mark is used properly.
Trade secret protection gives the owner rights against those who misappropriate or misuse the trade secret. Unlike the other three forms of intellectual property, a trade secret does not protect its owner from reverse engineering or from copying, unless the trade secret was obtained unlawfully. If a trade secret is maintained as secret, its protection lasts indefinitely.
How are IP Rights Enforced?
The owner of IP can license the IP to another. For example, a patent or trademark owner can license another party the rights to use the patented invention or the mark in a certain geographic area for a certain period of time. A copyright owner may similarly license another for certain uses of the work. A trade secret can also be licensed to others as long as it will be maintained as secret.
In addition, an IP owner can sue anyone who violates the owner’s IP rights. Thus, a patent, copyright, or trademark owner may sue anyone who uses the IP without the owner’s consent for infringement. Remedies may include an injunction, a reasonable royalty, actual damages, statutory damages, exemplary damages, and attorneys’ fees, depending on the type of IP and the circumstances of its infringement. A trade secret owner may sue for misappropriation of the trade secret and obtain an injunction, compensatory damages, exemplary damages, and attorneys’ fees. Trade secret misappropriation may also result in criminal liability.
Because the most important asset of a business may be its IP, careful attention should be paid to protecting it. In most cases, if IP is not protected from its inception, some or all of the owner’s rights may be lost.