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Intellectual Property and Business

Intellectual Property Files

Intellectual property (IP) is a general term that covers many types of creative and intellectual works. Your business might have intellectual property without you even realizing it. For example, your business has intellectual property if you have a secret recipe, a company logo, or a unique manufacturing process. Intellectual property encompasses all creations of the mind.

As a small business owner or startup company, you must avoid infringing on anyone else's intellectual property. You should also protect your own intellectual property. The four types of intellectual property are patents, copyrights, trademarks, and trade secrets.

Below, we will discuss the four types of IP rights and how you can protect them.

Patents

If your startup has created a useful and new invention, a patent can protect that invention.

A patent gives an inventor the right to exclude others from making, using, or selling their invention. In exchange for this exclusive right, the inventor must share the story's details with the U.S. Patent and Trademark Office (USPTO). The details then become public.

The three types of patents are utility, design, and plant patents.

  • Utility Patents: When you think of patents, you probably think of utility patents. The USPTO gives utility patents for inventions that are both new and useful.
  • Design PatentsDesign patents cover new and original designs for manufactured products. A design patent protects the product's appearance rather than how it works.
  • Plant PatentsPlant patents are less common than utility and design patents. The USPTO offers plant patents to people who discover or create a new type of plant.

How To Protect Your Patents

You must apply for a USPTO patent to secure protection for your business's inventions. You should file for a provisional, or temporary, patent right away. Once you have filed for a provisional patent, you can put the words “Patent Pending" on your invention. You can apply to convert a provisional patent into a non-provisional patent within 12 months of filing for the provisional patent.

The patent application process is more complex and expensive than copyrighting or trademarking. You must prove your invention or innovation is non-obvious, novel, and useful. If your business is seeking patent protection, it's a good idea to talk to a patent lawyer.

You cannot keep your invention a trade secret if you get patent protection. In your patent application, you will reveal the details of your invention and make it public. Although you lose the ability to keep it secret, you will be able to prevent others from legally profiting from your invention.

This exclusivity gives the patent holder a major competitive advantage. There is a 20-year term for utility and plant patents. Design patents before May 13, 2015, receive a 14-year term and all others receive 15 years of protection.

Copyrights

Copyrights are a type of IP protection available for people who create original works. The types of works covered by copyright protection include:

  • Art
  • Architecture
  • Literature
  • Music
  • Movies
  • Sound recordings

Your work will enjoy copyright protection as soon as it is created, but the work cannot merely be spoken, performed, or imagined. It must be recorded or fixed in a tangible medium to be copyrighted.

Who Owns a Copyright?

In general, the author or creator of a work is the copyright owner. However, there is an important exception to this in the business world. If you hire someone to create something, it will be considered a work made for hire, and you are the owner of the copyright.

How To Protect Your Copyrights

A copyright exists as soon as you create a work, but it is still a good idea to register your business's works. To sue for copyright infringement on a work, you must have registered it.

If your business hires or employs people to create copyrighted works, you should create a contract for those employees to sign. The contract should make it clear that your business owns the copyrights on the works that the employees create during their employment.

Trademarks

trademark is a word, logo, symbol, business name, brand name, design, or any combination of those things. Businesses use trademarks to differentiate their products or services from those of competitors. As a small business, it is essential to have a good trademark to increase your visibility in crowded markets.

How to Create a Strong Trademark

When creating a trademark for your business, you should ensure it is a strong trademark. The types of acceptable/strong trademarks, in order from strongest to weakest, are:

  • Fanciful: Fanciful trademarks are made-up words like Pepsi, Starbucks, or Ikea.
  • Arbitrary: Arbitrary trademarks are real words that have no relation to the product they identify. Apple computers are a good example of an arbitrary trademark.
  • Suggestive: Trademarks hint at a product's features or qualities. Think of KitchenAid, for example.

Unacceptable/weak trademarks are:

  • Descriptive: A descriptive trademark describes a feature of your product and is not distinctive. For example, the name “Bright" would be descriptive and weak for a lightbulb trademark.
  • Generic: A generic trademark is simply the actual word for the product. For example, “Barber Shop" for a barber shop is the weakest type of trademark and can't be registered.

As an illustration of the differences between strong and weak trademarks, think of Razor scooters. When the word "Razor" is applied to scooters, it is a strong trademark because it is arbitrary or may suggest speed. However, the trademark Razor for razor blades would be generic and unacceptable for federal trademark protection. Other examples of strong trademarks include fanciful (made-up) words like Google and Rolex.

The United States Patent and Trademark Office (USPTO) provides a helpful visual representation of strong and weak trademarks.

How to Protect Your Trademark

The stronger your trademark is, the easier it will be to protect.

If you are using your trademark on your goods or with your services, you already own your trademark. You can increase your trademark protection by applying for a registered trademark. Until your trademark registration is approved, you can use the letters "TM" near your trademark. After registration, you can use the ® symbol to show that it is federally registered.

You can file a trademark application with the USPTO. Visit FindLaw's How to File a Trademark Application page for more information.

Trade Secrets

There is a lot of misinformation out there when it comes to trade secrets. A trade secret is not a form of nationwide protection for intellectual property. It's essential to understand that trade secrets are just that – secrets. The best protection for your trade secret is to guard its secrecy.

Sometimes, a company's trade secret gives it a substantial competitive advantage. This is especially true in the food and beverage industry with recipes. Some examples are the secret recipes for Kentucky Fried Chicken and Coca-Cola.

Coca-Cola has gone to great lengths to prevent anyone from stealing its secret recipe, claiming it keeps the recipe locked away in secret vaults. The company has also stated that only a few high-level executives know the recipe. Coca-Cola has added to its name recognition by publicizing these stringent security measures.

How to Protect Your Trade Secrets

It might seem obvious, but the most important thing you can do to protect your trade secrets is to keep them under wraps. The following steps can help your business to maintain secrecy:

  • You should have nondisclosure agreements in place with business partners and employees. Nondisclosure, or confidentiality agreements, prevent employees and partners from using or revealing your trade secrets. Take, for example, a bakery with a popular new gluten-free cookie recipe. A nondisclosure agreement prevents the bakery's employees from going to another bakery and giving away the secret recipe.
  • Train your employees regularly on the importance of keeping the company's secrets.
  • Password-protect your company's computers. If someone steals an employee's laptop, this will help to prevent access to your trade secrets.
  • Limit outside access to your business. Tours or non-employee visits should be infrequent, if at all.

You may be able to sue if someone steals your trade secret, but you will likely need to prove they accessed the trade secret illegally.

Some states have enacted laws to protect trade secrets. To benefit from this protection, you must show that your business takes precautions to secure your trade secrets. The bottom line with trade secrets is to do everything you can to maintain their secrecy.

How To Monitor for Infringement

IP infringement is the unauthorized and unlawful use of distributing, reproducing, or exploiting someone's IP rights.

As a small business owner, you should protect many aspects of your company, such as your company name, a new product design, a recipe, and more. In the early stages of ensuring you have intellectual property protection, you must also consider how to monitor for infringement. As a small business or startup company, it is your responsibility to be on the lookout for infringement. Here are ways to help monitor for infringement:

  • Monitor social media platforms
  • Use and search intellectual property databases
  • Review marketplaces, if you sell products online
  • Monitor competitors
  • Hire an intellectual property watch service

If you find that someone has infringed on your IP rights, you can take different types of legal action.

  • You should document the infringement. Next, you should send a cease-and-desist letter. This letter will demand that the infringing party stop using your IP immediately. An IP attorney can help draft and send this cease-and-desist letter.
  • If the infringed party does not cease using your IP, the attorney can help you file a complaint or a lawsuit.
  • These actions can sometimes lead to a negotiation or settlement. You can also pursue damages if the infringing party has caused your company financial harm.

Do You Need Legal Advice?

Intellectual property is a complex and evolving area of the law. If you have questions about your business's intellectual property rights or drafting an NDA for your IP assets, an intellectual property attorney can help.

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