By: Entrepreneurship & Innovation Clinic Student
December 2016
Many start-ups and small businesses start with an idea. They grow around that idea, nurture it, grow it, and soon they have a successful business. But how can you protect that idea? That is where intellectual property and the various kinds of protections come in. Intellectual property protections vary, but their ultimate goal is to protect the work that has come from your idea. Many individuals hear about the different types of intellectual property and think that they want one type, when in reality they another may be better suited for their needs.
There are four main types of intellectual property: copyright, trademark, trade secret, and patents. Each of these types of intellectual property protect a different type of work. Some, however, do overlap. The protections offered by each type of intellectual property also differ and are better suited for certain situations. Keep in mind, intellectual property only protects the expression of ideas, not the ideas themselves. You must do something other than just having an idea in your head.
A copyright is the exclusive right to print, publish, reproduce, create derivative works, and license a work of art. A work of art is a rather broad definition. For example, it includes the traditionally thought of forms of art such as paintings and books, but it also includes the code of software. However, in order to be eligible a copyright must meet three requirements. First, a copyright must be fixed in a tangible medium. For conventional art this is simple. A painting or a book are painted or printed on something physical. For other forms of art this is more difficult. Look at software code for example. It is written on a computer, but this is sufficient to be considered fixed for copyright. The second requirement is that the art is original. Essentially, this means you cannot copy someone else's work. Finally, the work must meet a minimum level of creativity. You must add something to the art that is creative, though this is a very low threshold. Keep in mind, a fact cannot be copyrighted, because there is no creativity here. However, a book on alligators that contains many facts can be copyrighted because there is creativity in the words you chose and the way the facts are presented.
Copyrights give a host of protections for the works they protect. As above, you can print, publish, reproduce, license and creative derivative works (works based on the original, such as sequels or movies based on a book) exclusively. A copyright comes into existence the moment that the work of art is created. You do not need any additional steps to actually get the copyright. However, if you wish to actually enforce your protections, via court orders, lawsuits, etc. then you must federally register your copyright with the US Copyright Office for a relatively low fee. Once registered, a copyright will last for the life of the author plus seventy (70) years. After this, the art goes into the public domain and can be used by anyone.
You may want to get a copyright for any art that you create. This is the most obvious use. But also for things that you plan on creating sequels or derivative works of. Copyrights are excellent for software codes as well because code is something that is modified fairly regularly with updates, so a copyright will automatically attach with these updates.
A trademark protects an entirely different work than a copyright does, though the actual subject may be the same. A trademark is a word (or phrase) or design that a business uses in commerce. Essentially, a trademark is used to protect your brand. Trademarks have fewer requirements than copyrights. A trademark must be used to designate a source of a product (the producer) and used in commerce. For example, a label on a product would be a trademark. The mark could be a series of words or a design. However, certain marks cannot be protected. Generic trademarks just describe a category of products or services. For example, you could not trademark the mark Jacket for a line of jackets. Descriptive marks are also too general and generally describe an aspect of the good. The mark Leather would likely be considered descriptive if it were for a line of leather jackets as it describes a part of the goods. Descriptive marks can, however, pick up secondary meaning. This means the mark is so tied with the product that it gains a new meaning and people think of the product when they hear the mark. This generally takes place over time. An arbitrary mark is protectable because the meaning of the word is unrelated to the goods. Using the mark Book for a line of jackets would be this. Finally, fanciful marks are protectable and are essentially made up words. For example the made up work "Anter" would be a fanciful mark on any product.
Keep in mind, trademark protection only allows you to prevent other people from using your mark in commerce if it is being used for the same type of goods you make. You could prevent someone from using the Book mark for a line of jackets, but not if they use the mark Book for fresh produce. Most states have common law trademarks that begin the moment the mark is used in commerce (federal trademark protection uses this date as well) but they are limited to the state and general area the product is sold. Federal protection applies throughout the country and must be registered with the US Patent and Trademark Office (USPTO).
Trade Secrets function differently. A trade secret is a type of technique, recipe or business model that a business uses and wants to keep secret to prevent competition from having it. There are six factors that are considered in determining whether something is a trade secret. These boil down to whether or not the trade secret has been kept as a secret. If it has, then an employer can generally prevent their employees from divulging their trade secrets to others. It is especially useful in preventing corporate espionage and preventing former employees from giving away trade secrets to their new employers. The Uniform Trade Secret Act protects trade secrets at the state level. Not all states have adopted this act, however, and thus each state may have some differences. There is no federal trade secret protection. The benefits of trade secrets are that they do not cost anything to protect and there is no need to register it. Simply keep your practice secret and include clauses in contracts in order to treat the practice as a trade secret.
The last type of intellectual property is patents. A patent protects inventions. In particular, getting a patent in an invention grants you the sole authority to sell, create, and distribute the patented object. Inventions include the things most people think of, such as a light bulb or a type of television, but could also include software codes, algorithms, and biological constructs. They are filed with the USPTO. In order for an invention to be patentable it must meet several requirements. First, it must be a patentable subject matter, meaning it can't be something like art. It must also be novel. This means that the invention has to be new in some way, or at least a part of it is. Third, the invention must be non-obvious. The invention can't be something that just be simple to figure out or just an addition of one thing to something else. There needs to be an inventive step. Finally, the invention must be useful.
While patents are often thought of as the most highly sought after intellectual property, they are particularly difficult to get. The USPTO has high standards for what they accept as an invention deserving patent protection. Furthermore, the protections are not limitless. Patent protection only lasts for twenty years; after which anyone can use the invention. Patents can also cost upwards of thousands of dollars to get. Therefore, getting a patent is not necessarily in the best interest of every business.
Ultimately, it is up to the individual business to decide what is the best intellectual property protection to pursue. In some instances, this is easy, as there is no real question about whether something falls into one category and not the other. But in others there may be some confusion. For example, would a copyright or a trademark be better on a logo? Would both be beneficial? Having a knowledge of the different types of intellectual properties can help with this decision.