Intellectual Property Law

Intellectual Property (IP) is a rights category that protects creative and innovative works. These include intangible assets like images, ideas, symbols, logos, writings, and designs.

There are four main types of intellectual property:

• Copyrights
• Trademarks
• Patents
• Trade Secrets

FindLaw's Intellectual Property section covers the four forms of intellectual property and related issues for small business owners.

Why Small Businesses Need Intellectual Property Protections

In the early stage of an entrepreneur's or small business owner's start-up company, many intellectual property protections and IP rights exist to consider. Small businesses enjoy IP protection in various ways. IP protection is a valuable asset to businesses. It also adds to the company's value.

Intellectual property protection for small businesses can cover many things. A small business can use trademark protection to protect its brand names, company names, and logos. That protection prevents others from using similar marks or names. Having a registered trademark with the USPTO creates trademark protections.

Small business owners may also need NDAs or confidentiality agreements for collaborations with other companies. Small businesses can get copyright protection for original artistic content such as music, books, sound recordings, website text, software, and marketing materials.

Copyrights

A copyright is a federal protection provided to the creators of original works, such as:

• Books
• Movies
• Recordings
• Music
• Photographs
• Software

Copyright protections only apply to "fixed works." This means documented work in a form you could "touch" (tangible) can get copyrighted. A live performance of a play is not copyrightable, but the performance on a DVD is. Copyright protections do not extend beyond the actual work itself. It does not include the characters' names or the work's title. For example, copyrights exist for each Harry Potter book. Yet it does not mean other writers cannot publish books about another young wizard.

Copyright owners have the exclusive right to:

• Reproduce their works
• Produce derivative works
• Sell or distribute their work
• License the copyright to others
• Perform the work in public
• Display the work in public

Copyright protections encourage creators to produce original works. These protections allow them to gain financial benefits from their creative efforts through exclusive rights or licensing. It also ensures that others cannot use their creation without permission or compensation.

Learn more about the basics of copyright law, including infringement protection.

Trademarks

A trademark is a symbol, word, or phrase used to identify and promote goods or services in commerce. These trademarks distinguish them from the goods or services of others. They may take the form of words, symbols, or devices. Trademark protection also covers social media handles and new products you may produce with the brand name or logo.

Patents

At its most basic level, a patent is the federal protection of an invention. Patents encourage innovation by giving the patent-holder (often the inventor) the exclusive right to make, sell, and use the invention for a limited period (typically 20 years).

The three main types of patents are:

• Utility patents — protect machines, chemicals, and processes (most common)
• Design patents — protect a product's unique appearance or design
• Plant patents — preserve the reproduction of plant varieties through grafting or other means other than from seeds

The creator must file a patent application with the USPTO to have patent protection.

Trade Secrets

A trade secret is private information that gives a business a competitive edge against its competitors. A famous example of a trade secret is the recipe for Coca-Cola. Other examples of trade secrets are:

• Formulas
• Recipes
• Engineering information
• Computer program codes
• Processes
• Methods

You cannot register trade secrets but have employees, business partners, or third parties sign nondisclosure agreements to protect your intellectual property.

What To Do With Infringements

Your business may take legal action if someone infringes on your IP assets. Most IP owners who have had their IP rights infringed on will first send a cease-and-desist letter to the person(s) who violated the IP assets. If that doesn't work, then they will proceed with a lawsuit.

Penalties for IP infringement vary but include the following:

• Criminal penalties — fines, imprisonment or both
• Damages — monetary damages for any income you lost, public relations, press releases, or other damages suffered
• Injunction — the court may issue an order forcing someone to stop using the protected IP
• Seizure and destruction of infringing goods — law enforcement may take and destroy goods that infringe on IP rights
• Statutory damages — predetermined amounts of damages awarded regardless of the actual loss suffered

Businesses need to defend their intellectual property rights. This allows them to avoid these penalties and consequences of infringement. If a company does not protect its rights, it may lose them.

Find an intellectual property lawyer near you to get advice on your business creations and designs.