Intellectual Property 101- Considering the Different Types of IP
Many small business owners are confused about intellectual property, or as the legal community calls it, IP. Unfortunately for many business leaders, they assume that IP is the same as copyright, or that IP only pertains to artists. This type of misunderstanding can lead to serious legal problems. In fact, there are different types of IP that we have outlined for you below.
Copyrights – Protect the Expression
While it is true that copyrights are a form of intellectual property, that’s only a fraction of the story. Of the different types of IP, copyrights may be the most misunderstood. Many business owners fail to realize they own property that needs copyright protection. Others may consider copyright protection to be too expensive. Both misconceptions can result in serious hits to your company’s budget.
Copyright protection relates to published documents, such as books, magazine articles, and advertising copy. However, copyright also applies to items you may not have considered, including computer software and photographs. The key is in the word “published.” In IP law, “published” refers to documents (including computer software and photographs) that have been distributed to anyone other than the author. Further, copyright is applied automatically, and in many cases, extends beyond the life of the author or copyright holder.
That means that the email newsletter you distribute to your customers every Friday is considered to be “published.” While you may not consider your weekly messages to be overly creative, it’s still a good idea to include a copyright notice, such as “Copyright 2017 Joe Smith Company,” somewhere in the message.
One problem for business owners, is when they hire a contractor to create a website, take photos or videos, or write software. Such contractors own the copyrights to such material, unless the business owner has a contract with very specific provisions on it. Read our article, Don’t Get Screwed – Managing Website Vendors for more information on how to make sure you don’t end up a victim after spending thousands on your pet project.
We have more articles about Copyrights.
Trademarks – Protect Source-Identifying Marks
The Coca-Cola® logo is trademarked. So is the Nike “swoosh.” Trademarks are 1) distinctive marketing words, phrases or elements that are 2) identified with a particular company or service, 3) properly registered with USPTO and 4) guarded by the trademark owner. Trade dress is similar, and applies to a distinctive look and feel to your company’s actual products and services. Unlike copyright protection, which applies across the country, trademark protection is not automatic outside of the immediate area where it is most commonly used. In other words, you must trademark your mark to not only to receive protection nationwide, but to prevent someone else from doing it before you do.
Registration, and diligent protection of trademarks and trade dress, are essential to maintaining trademark protection. For example, “Xerox” is used by many people as a generic term for photocopying, but the name “Xerox” is actually a trademark. Although the company’s efforts to protect its trademark seem to have been marginally effective at best, the diligence of its efforts comprises a major aspect of what the courts consider. Nintendo also worked aggressively to protect its trademark, arguably more successfully than Xerox. On the other hand, “aspirin” and “cellophane” lost legal protection as trademarks because the companies that registered them as trademarks failed to make diligent attempts to protect their intellectual property.
We have more articles about Trademarks.
Patents – Protect Useful Inventions
If you’ve reinvented the wheel, or devised a similarly unique innovation, seeking patent protection is a logical next step. However, the application process for a patent is lengthy and expensive. Even after obtaining a patent, you are responsible for protecting your intellectual property. That’s because, contrary to common belief, a patent does not grant the patent holder exclusive rights to produce a product. Instead, patents grant holders the right to prevent others from reproducing essentially identical items for a specified length of time—usually just a few years. Holding a patent entitles the holder to take legal action against individuals or entities that violate their rights. Of the different types of IP, patents are often the most complex.
We have more articles about Patents.
Trade Secret – Protect Sensitive and Secret Information
Trade secret law is generally enforceable on a state-by-state basis, although federal protection was passed by the Obama administration in 2016 (which provides some protection, if you meet very specific requirements — Read more).
To best explain “trade secret law,” I usually tell clients “think of the Coca-Cola® formula.” One would assume the company only provides access to the formula exclusively on a need-to-know basis, and we would also assume employees, contractors, etc, all sign confidentiality agreements, and that some sort of protection is used to keep the formula private. To take advantage of trade secret law, one must simply treat information “as a secret.” Perhaps not with the same vigor as we assume Coca-Cola® uses to protect its formula, but you do need to take proactive steps to keep such information private. Once it’s not secret, you lose the protection. There are no registration requirements to take advantage of trade secret law — it’s all in how you protect your information.
We have more articles about Trade Secrets.
Contracts – Create Specific Duties to Protect Your Business
Contracts can provide a surprising amount of protection to your business, even for aspects of your business that aren’t generally protected by any of the other means identified above — provided you have a professionally drafted contract. Contract law permits you to define specific duties and obligations between the parties, which can be uniquely customized to your business. For example, do you care about:
- Specific timeframes?
- Specific duties or obligations?
- Limiting liability or warranties?
- Specific formulas for computing what is paid or owed?
- Specific penalties for failing to perform?
All these are available with the right contract. The one big problem with a contract, versus the above-mentioned IP, is that contracts only apply to the parties who signed the contract. Except in very rare circumstances, you cannot generally hold a contract to a third-party who has not signed the contract.
We have more articles about Contracts, and we’re one of the few law firms that provide a low-cost, flat-rate contract review for business owners in an attempt to help business owners get quick, cost-effective contract assistance before signing that contract.
Different Types of IP Protection beyond Borders
Copyrights, trademarks and patents do not automatically travel across borders, although contracts may in certain circumstances. IP registration by the United States Copyright Office, or USPTO, provides limited protection abroad at best. In many instances, it is necessary to apply for IP protection in a particular country to protect your intellectual property in that country. In other cases, the process of registering for IP protection is prohibitively expensive or even impossible to achieve without expert advice. It is critical you seek competent advise from an intellectual property attorney if you need IP protection in other nations.
Other Considerations for Different Types of IP
Even if you have all your IP ducks in a row, you may still miss an important step. For instance, if you intend to maintain a website for your company (a must for nearly every business), you should purchase the top-level (.com) domain for your business name, business slogan, or another closely associated name or phrase, along with accompanying email addresses. In most cases, you must also register your business name with the proper office in your state, even if you opt to skip IP protection.
Copyrights, trademarks, trade dress, trade secrets, patents and contracts can be complex. It’s natural that you may still have questions. Contact us, and we’ll be happy to address any areas of confusion and get you on the road to obtaining proper IP protection for your business.