Whether it’s a product or process, design or idea, if it’s a concept that came from your mind, it’s your intellectual property. And you need to protect it. By doing so, you assert your rights over the material you’ve worked so hard to bring to life.
So what exactly constitutes intellectual property, you ask?
Intellectual property – “IP” for short – is defined by the World Intellectual Property Organization (WIPO) as:
“Creations of the mind, such as inventions; literary and artistic works; designs; symbols, names and images used in commerce.”
While the United States Patent and Trademark Office (USPTO) explains IP as:
“Creative works or ideas embodied in a form that can be shared or can enable others to recreate, emulate, or manufacture them.”
The rights associated with intellectual property allow creators or owners of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation. (1)
In other words, IP isn’t the tangible stuff like land, equipment or currency. Rather, it’s the intangibles.
IP can represent materials that are technical in nature, like:
- Processes and procedures
- Technical roadmaps and documentation
IP also embodies items that support your position in the marketplace. For example:
- Brand attributes: logos, promotional material or video
- New products or services
- Business plans
- Licenses and approvals
- Customer or supplier contact information and tendencies
- Financial information (including pricing and costing)
- Distribution information
The takeaway? If it’s the result of your creative, mental activity, it’s your intellectual property.
“So why is IP important?”
In the United States, the commonly held belief is that our culture, society and economy benefits when there exists a healthy, ongoing exchange of information and ideas. But unless people with an ability to develop and implement new ideas have a way of doing so without risking a loss of ownership, innovation stalls. Without IP protection, creators like you have very little incentive to develop better, more advanced offerings and our collective growth would slow significantly.
“OK, but why should I protect my IP?”
Often overlooked and routinely undervalued, intellectual property represents the fruits of your labor. All of the time, money and resources you’ve sacrificed to make your idea a reality? It can all be for naught should someone else take your creation and run with it.
As an entrepreneur or inventor, it’s your ingenuity that deserves to be rewarded, not someone else’s willingness to poach your work. The U.S. government agrees, and allows you to defend your IP using four main avenues: copyrights, patents, trademarks and trade secrets.
Ways to Defend Your IP
Patents – Protecting Ideas
Granted by the federal government, patents grant an inventor the right to exclude others from making, using, selling, offering for sale or importing in the U.S. a patented invention for a limited time – 20 years to be exact.
To be considered “patentable,” an invention must be new, useful and non-obvious.
Currently, three types of patents exist. They are:
May be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof (2)
May be granted to anyone who invents a new, original, and ornamental design for an article of manufacture (2)
May be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant (2)
“What’s a ‘provisional’ patent application?”
If you have a partially developed idea with an incomplete foundation, a provisional patent application enables you to apply for a patent without making an official patent claim, oath or declaration, which is to say you don’t have to disclose the kind of information a formal patent application requires.
A provisional filing places you ahead of any patent applications your competitors may submit later on and allows you to publicly explain, test or demonstrate your idea without hurting your chances of getting a patent in the U.S. and abroad.
Why file for patents?
There are seven primary ways a patent can be used to help your business. They are:
- To prevent or delay others from competing in your space
- To cultivate a reputation as a thought leader in your market
- To generate revenue via licensing
- To support a defensive position you can use to counteract or negotiate with competitors
- To use as leverage in joint venture negotiations
- To build corporate value for financial statements
- To use as a marketing tool
(Read more: The Essential Guide to Patent Filing)
Trademarks – Protecting Identifiers
Trademarks protect words, names, symbols or designs used to identify your goods or services. Created to protect the public from deception as to the origin or quality of goods and services, trademarks can help you defend against counterfeit activity while building value around your brand.
Trademarks are classified using the following categories:
Generic – Weakest
While one can still be considered a mark, generic words cannot be registered or enforced. Essentially, others are free to use them as they please.
Examples: Dry Ice, Yo-Yo
Descriptive – Weak
Descriptive marks paint a clear picture of the goods or services they protect but are only registerable if they possess a secondary meaning of source rather than the character of the product itself.
Examples: American Airlines, General Electric
Suggestive – Strong
Suggestive marks are just that – suggestive in nature without being descriptive of specific details associated with your goods or services.
Examples: Coppertone, Netflix
Fanciful and Arbitrary – Strongest
Considered the best kind of mark, fanciful and arbitrary marks are innately distinctive. Fanciful marks are not considered “real” words and thus, won’t be found in a dictionary. Arbitrary marks are actual words but have no discernable connection to the goods protected.
Examples: Xerox, Jaguar
Just like any other trademark candidate, a domain can be registered as a trademark if it acts as an identifier for the goods and services you offer and helps separate them from those sold by your competitors.
Examples: eBay, Tire Rack
“What are service marks?”
A service mark is no different from a trademark except for the fact that a service mark is used to identify source of a service as opposed to the source of goods.
“What about the circle R?”
A mark does not yet have to be registered in order for you to use the “TM” (trademark) or “SM” (service mark) labels. But don’t be tempted to use the “®” (federal registration symbol) while your trademark status is pending – that designation requires the approval of your registration application by the United States Patent and Trademark Office.
To protect the goodwill of your business and support the creation of consistent messaging while helping to unify your brand.
[Read more: The Essential Guide to Trademarks]
Trade Secrets –
Trade secrets are defined as information that has economic benefit because it is not generally known and efforts to maintain secrecy are reasonable given your specific circumstances.
One of the best and most common ways you can maintain trade secrets is by requiring outside parties to sign non-disclosure agreements prior to being exposed to sensitive information.
Examples of trade secrets include:
Methods or processes
A specific order of instructions or means of completing a step
Well-known formulas such as those used by Coca-Cola and KFC
Specially created articles used in manufacturing
Customer or supplier lists, including known preferences
Software used internally
Customized equipment such as machinery
Any information that would be significantly difficult to recreate, such as market surveys, research & development plans and contract terms
Why rely on trade secret protection instead of patents?
As long as you’re able to properly safeguard your trade secrets, they may last forever, whereas a patent cannot be protected for more than 20 years. What’s more, trade secrets are typically much more affordable than patents to prepare, secure and maintain.
Copyrights protect the tangible expression of your original work. So if your IP exists in a creative medium or is a creative work, you should copyright it. Otherwise, others are free to replicate and monetize your efforts without having done any of the work themselves. When you put copyright protections in place, duplication of your work is considered “infringement.”
While a work can be assigned a copyright marking (©) the moment it is created, obtaining official copyright registration from the U.S. Copyright Office is what makes your copyright enforceable and gives you the ability to sue an infringer in federal court.
Copyrights represent a cost-effective way to prevent the outright duplication of your creative works.
All four means of protecting your IP should be viewed as important, depending on your product or service and its overall development stage. And while it is smart not to approach IP protection feeling like you need everything all at once, you would be unwise to judge the use of IP protection as an unworthy endeavor altogether.
(Watch the video: “Why Should I Care About Copyright Law?“)
Protecting Your IP When Working with Others
For most ventures, a strong team is vital to an idea realizing its full potential. When it comes to partners, employees, freelancers and other vendors, trust must accompany talent if you are to avoid the pitfalls associated with early disclosure or even outright theft.
While it’s impossible to eliminate this sort of risk altogether, there are methods for managing it. Ways to preserve your intellectual property when you find yourself no longer flying solo include:
Non-Disclosure Agreements (NDAs)
Use for confidential discussions
Example: Having a conversation about your idea or showing your product with someone you think can help you with it in some capacity. An NDA is a part of most employment agreements.
Use for evaluation testing or simulations
Example: Having someone else test or evaluate your idea in order to determine if it works well enough to pursue or if they would like to make a purchase.
Joint Development or Consulting Agreements
Use for development, design and application services
Example: Paying for development work, prototype design or application testing.
Use for production planning and supply-chain decision-making.
Example: Making firm commitments on a production and logistics plan with a potential supplier.
Other ways to support the protection of your intellectual property include restricting internal access to select pieces of information, requiring the return of information as part of any and all agreements and training your employees to identify and document patentable inventions.
(Read more: Optimizing Your Patent Portfolio Management)
First Things First
What’s your business plan?
A business plan will help you respond to the following questions, all of which are critical to deciding the types of IP protection your business will find most valuable:
- What do you want to do with the idea that you have?
- Is your plan to monetize your idea yourself, or do you want to license your IP to someone else?
- Do you have any active employment agreements that may prevent you from claiming your IP?
- What are your goals regarding an exit strategy?
- If it’s a startup you’re leading, will you be looking to sell quickly, or work to continue building your company for the foreseeable future?
“Where do I start?”
If your company is a physical product, consider patents first, and don’t wait too long. Once an invention has been publicly disclosed by way of a publication, presentation or demonstration, you have one year to file for a patent. In most cases, you’re likely to be better served by avoiding any form of public disclosure until you are fully prepared to submit a patent application.
If your most valuable asset is your brand, think trademarks for your brand name, logo and any other identifiers that are important to public recognition of your brand. Just be sure each mark you wish to register is not likely to be confused with those registered by someone else.
If your company is a software business, you might want to focus on fundraising first and intellectual property later, with the exception of trade secrets. Given the software industry’s fast-changing nature, it’s more important to begin to establish a foundation by securing development funding, creating a distinctive brand and establishing a sound corporate structure.
Regardless of the type of business you’re overseeing, safeguarding trade secrets should be a consideration from day one, especially when collaborating with others both inside and outside of your organization.
(Watch the video: “What IP Protections are Important for Tech Startups?”)
Legal Information is Not Legal Advice