Definition: The ownership of ideas. Unlike tangible assets to your business such as computers or your office, intellectual property is a collection of ideas and concepts.
There are only three ways to protect intellectual property in the United States: through the use patents, trademarks or copyrights. A patent applies to a specific product design; a trademark to a name, phrase or symbol; and a copyright to a written document. All three methods have limitations--there's no one perfect way to protect an idea.
A copyright will protect the following categories of works:
- literary works
- musical works, including any accompanying words
- dramatic works, including any accompanying music
- pantomimes and choreographic works
- pictorial, graphic and sculptural works
- motion pictures and other audiovisual works
- sound recordings
- architectural works
- computer programs (sometimes the graphical user interface) and websites
Copyright protection gives the copyright holder the exclusive right to copy the work, modify it (that is, create "derivative works"), and distribute, perform and display the work publicly.
Ideas or concepts do not have copyright protection. Copyright protects the expression of the idea, but not the ideas themselves. For example, if I ask you what a chair is, you get a picture in your head; the picture I get in my head is different from the picture you get in your head and probably also different from the picture Buffy gets in her head. These are the "ideas" of what a chair is. However, if you were to draw the chair you envisioned in your head or use words to describe that chair, it's an "expression" of the idea--and that's what's protected by copyright.
Generally, the only protection for ideas and concepts is through trade secret law and/or confidentiality agreements, which provide a contractual remedy for misuse or disclosure of the idea.
Patents protect processes, methods and inventions that are "novel," "non-obvious" and "useful." If granted, a patent gives you a 20-year monopoly on selling, using, making or importing an invention into the United States. The requirements for a patent are complex, but here they are in a nutshell:
- Your work must be novel. This means it must not be known or used by others in this country, or patented or described in a printed publication here or abroad, or in public use or for sale in this country more than one year prior to the application for patent.
- Your work must be non-obvious. This means it must not be obvious to a person having ordinary skill in the pertinent art as it existed when the invention was made.
- Your work must be useful. This means that it must have current, significant, beneficial use as process, machine, manufacture, composition of matter or improvements to one of these. According to the Patent Office: "The word 'process' is defined by law as a process, act or method, and primarily includes industrial or technical processes. The term 'machine' used in the statute needs no explanation. The term 'manufacture' refers to articles that are made, and includes all manufactured articles. The term 'composition of matter' relates to chemical compositions and may include mixtures of ingredients as well as new chemical compounds. These classes of subject matter taken together include practically everything which is made by man and the processes for making the products."
Patent protection requires full public disclosure of the work in detail and therefore precludes maintaining any trade secret protection in the same work.
A trademark is like a brand name. It is any word(s) or symbol(s) that represent a product to identify and distinguish it from other products in the marketplace. A trademark word example would be "Rollerblades." A trademark symbol would be the peacock used by NBC.
A trademark can be registered in three ways:
- By filing a "use" application after the mark has been used.
- By filing an "intent to use" application if the mark has not yet been used.
- In certain circumstances in which a foreign application exists, you can rely on that.
The (TM) mark may be used immediately next to your mark. The ® registration symbol may only be used when the mark is registered with the PTO. It is unlawful to use this symbol with your mark before receiving an issued registration from the PTO.
What qualities make for a strong trademark? The cardinal rule is that a mark must be distinctive. The more distinctive it is, the easier your trademark will be to enforce. This is why so many trademarked products have unique spellings.
Trademark rights last indefinitely if the company continues to use the mark to identify its goods or services. When the mark is no longer being used, the registration is terminated. The initial term of federal trademark registration is 10 years, with 10-year renewal terms.
There is a great deal of confusion regarding trade secrets. Many people think that a trade secret is some type of protection provided by the government that allows them to seek recourse in court should someone infringe upon their idea. However, unlike copyrights, trademarks and patents, a trade secret is not registered with any government office to provide a verifiable public record of any claims to the secret. You can, however, declare one to a patent lawyer in a notarized and signed disclosure. In this manner the trade secret belongs to you forever--or until someone leaks it.
Trade secrets refer to items such as recipes that are unique and provide a business with a competitive advantage, but which cannot be safeguarded under current forms of idea protection such as copyright, trademark or patent. The best form of protection for these items is to keep them a secret. One of the most famous and best-kept trade secrets is the formula for Coca-Cola.
The best way to secure the information for a trade secret is to restrict access to the secret and have individuals and companies sign nondisclosure agreements with you should you enter into a relationship with them which will require them to know some aspects of the secret. If someone independently develops or reverse-engineers your trade secret, there's nothing you can do. If someone does leak it, you can sue for theft. Suing, however, cannot stop the person from using the leaked information. So although you may get money from the suit, you lose the larger potential profits you could have made from the idea. Still, if your luck holds and your trade secret remains secret, royalty income from it can last significantly longer than the patent period.