One of the key aspects of a successful start-up is the ability to leverage assets to raise capital for continued operation, growth, and expansion. Traditionally, the main assets of startups are innovations that require Intellectual Property protections, such as Patents, Trademarks, Copyrights, and/or Trade Secrets. Startups must comprehensively understand the types of intellectual property and fashion a forward-looking strategy to protect innovations utilizing intellectual property.
Patents
Patents, in the United States, are a property right granted by the government to protect three general classes of invention Utility, Designs, and Plants. The Utility class protects any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.[1] The Designs class protects any new, original, and ornamental design for an article of manufacture.[2] The plant class protects asexually reproducing distinct and new varieties of plants.[3]
To obtain patent protection an applicant must file a patent application with the United States Patent and Trademark Office, which is examined by a patent examiner. The examination process consists of communications between the examiner and the applicant, or their legal representation, to define the proper scope of the invention and meet the requirements of Title 35 of the United States Code. Typically, the principal reasons for rejection are subject matter ineligibility, lack of novelty, or obviousness of the claimed invention.[4]
Examinations that end in allowance and issuance of a patent grant a limited-time monopoly for the inventor, inventors, or an entity to whom the inventor(s) assigned ownership, to prevent others from making, using, selling, offering for sale, or importing the claimed invention.[5] In the case of Utilities and Plants, the term is 20 years from filing[6], while Designs carry a term of 15 years from issuance.[7] An additional feature of Utility and Plant applications are provisional rights, which may allow an inventor to obtain a reasonable royalty from the date of publication to the date of issuance of the application as a patent based on certain conditions.[8]
Trademarks
A trademark is a source indication. Stated another way, trademarks identify and distinguish the source of goods of one party from goods of another party.[9] Traditionally, a trademark consists of a word, phrase, symbol, design, or combination thereof, but could also include a smell, or a sound.[10] A service mark is the same as a trademark, except that it serves to distinguish services, instead of goods.
To obtain a federally registered trademark, or service mark, an applicant must file an application with the United States Patent and Trademark Office, which is examined by a trademark examining attorney. The examination process consists of communications between the examining attorney and the applicant, or their legal representative, to determine compliance with Title 15 of the United States Code. Typically, the principal reason for refusal of registration is the “likelihood of confusion” with a previously registered mark or a prior-filed pending application.[11]
Unlike patents, trademarks do not have a fixed statutory period and can endure indefinitely as long as certain conditions are met. A non-exhaustive list of requirements for maintaining a trademark includes continuous use in commerce [12], and meeting certain procedural requirements established by the United States Patent and Trademark Office.[13]
Copyrights
Copyrights protect original works of authorship as soon as the work is fixed in a tangible form of expression.[14] A somewhat unique aspect of copyright protection is that protection automatically attaches to the work once it is fixed, but owners can take the additional step of registering the work for copyright protection, which is necessary to enforce certain rights through litigation.[15]
Copyright registration entails submitting an application that includes information required by the United States Copyright Office, such as the title of the work, the author of the work, the name and address of the claimant or owner of the copyright, the year of creation, whether the work is published, whether the work has been previously registered and whether the work includes preexisting material.[16]
Similar to patents, copyrights have a fixed term of the life of the author of the work plus 70 years.[17] In the case of joint authorship, the copyright endures for 70 years from the death of the last surviving author.[18] Additionally, for anonymous works, pseudonymous works, or works made for hire, the term of the copyright lasts for 95 years from the first publication, or 120 years from the creation of the work, whichever expires first.[19]
Trade Secrets
Trade secrets typically encompass information, such as formulas, patterns, compilations, programs, devices, methods, techniques, or processes.[20] Additionally, certain business and/or financial information, not eligible for patent protection, can be the subject of trade secret protection.[21] To qualify as a trade secret the information must (1) provide economic advantage to the owner of the trade secret by virtue of not being known, or “readily ascertainable” by other persons, and (2) the owner of the trade secret must take reasonable steps to ensure the information remains secret.[22]
A unique aspect of trade secrets is that there is no mechanism for registration of a trade secret, as disclosure of the trade secret would result in the information not being secret any longer. Instead, owners of trade secrets must rely on other legal documentation, and protocols such as restriction of access to the trade secret, non-disclosure agreements, and other security mechanisms, to maintain their trade secrets. Trade secrets rely on a combination of state and federal law, and span both civil and criminal penalties for misappropriation.
Trade secrets, similar to Trademarks, can endure in perpetuity and in fact, do endure as long as the holder of the trade secret takes reasonable efforts to maintain secrecy.[23] However, if lawfully discovered, through independent discovery, reverse engineering, or other lawful means, and disclosed to the public, trade secret protection is lost.[24]
With this brief overview of Intellectual Property protections in mind, it is most important to realize that protections may overlap even within a singular product, for example, a new self-driving lawnmower. Assuming, novel and non-obvious aspects exist in this lawnmower, one or more utility patents may be appropriate to protect the machine, the self-driving methods, parts of the machine, etc. Furthermore, one or more design patents may be appropriate to protect the ornamental features of the machine such as the shape of the body, cowling, etc. While our lawnmower can provide protection to plants by cutting, or not cutting them as appropriate, the lawnmower itself is not eligible for plant patent protection. To market the lawnmower, a trademark may be needed for a new logo, word, or symbol. Additionally, copyright protection may be needed for the logo, any source code for the algorithm implemented in the lawnmower, service manuals, advertising materials, etc. Finally, trade secret protection may need to be sought for customer lists, manufacturing processes, specific formulas used in self-driving functions, etc. This singular innovation can build on every pillar of Intellectual Property protection to create a web of protection, and leaving out any one of them can create a weakness in this web of protection.
Very often innovations do not fit neatly into one category of intellectual property protection, and often a layered approach of several protections is more appropriate for an innovation.
[1] 35 U.S.C. § 101 (2011).
[2] 35 U.S.C. § 171 (2011).
[3] 35 U.S.C. § 161 (2011).
[4] Citation.
[5] 35 U.S.C. § 154 (2011).
[6] Id.
[7] 35 U.S.C. § 173 (2011)
[8] 35 U.S.C. § 154(d) (2011)
[9] https://www.uspto.gov/sites/default/files/BasicFacts_0.pdf
[10] https://www.inta.org/topics/non-traditional-marks/
[11] https://www.uspto.gov/sites/default/files/BasicFacts_0.pdf
[12] https://www.uspto.gov/trademarks/maintain/keeping-your-registration-alive
[13] https://www.uspto.gov/trademarks/basics/maintaining-registration
[14] https://www.copyright.gov/what-is-copyright/
[15] https://www.copyright.gov/what-is-copyright/
[16] https://www.copyright.gov/circs/circ02.pdf
[17] 17 U.S.C. § 302 (1998).
[18] Id.
[19] Id.
[20] https://sgp.fas.org/crs/secrecy/IF12315.pdf
[21] Id.
[22] Id.
[23] https://www.uspto.gov/sites/default/files/documents/tradesecretsiptoolkit.pdf.
[24] Id.
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