We live in a knowledge economy and are surrounded by ideas and innovation. Businesses generate new ideas and create innovations at every turn—from the inventions that power the devices we use on a daily basis to the brand names and logos that are attached to those products to the businesses that are driving our economy using intangible assets.
In the early stages of a business, these ideas and innovations are intangible and have not yet blossomed to the point of being property in any real sense of the word. Instead, they are simply intangible assets. Through careful planning, companies can convert these intangible assets into intellectual property (or IP)—a term of art that refers to intangible assets that have obtained legal protection. This book is largely about the process of converting unprotected, intangible assets into intellectual property.
Before you can create a plan to convert your intangible assets into intellectual property, you need to develop a base-level understanding of the various kinds of intellectual property. There are four primary forms of intellectual property: patents, trademarks, copyrights, and trade secrets.
Patents are the most common form of intellectual property used to protect a new invention. Inventors can obtain a patent for nearly any invention, including a new method for doing something, a device, a machine, an article of manufacture, or an ornamental design. You can even patent seeds and plants under certain circumstances. Inventors can also obtains patents for new improvements to an invention. Thus, patents can be used as a means to convert a wide array of intellectual capital into a protected asset.
The process of converting an invention into protected IP is not simple. Inventors must file a patent application, engage in a back-and-forth discussion with the U.S. Patent and Trademark Office, and ultimately convince the office that the invention qualifies for a patent. The process can be expensive and time-consuming.
The rewards for obtaining a patent can be significant. A patent grants its owner the exclusive right to make, use, sell, offer for sale, or import a product or service that uses the invention for a period of up to twenty years (depending on the form of the patent). Thus, entrepreneurs who obtain a patent can limit their competitors’ ability to use the invention to compete in the market. This ability obviously has significant business advantages.
Learn more about patents by visiting the Patent Basics Page.
Trademarks are the form of intellectual property that is used to protect a company’s branding. They protect trade names, logos, slogans, and other similar marks that are associated with a brand.
Unlike patents, trademarks generally obtain legal protection automatically. So-called common-law trademark rights arise automatically as a result of a company (or individual) using a mark in commerce (i.e., business). As soon as an entrepreneur starts using a mark as part of his or her business, the mark will begin to obtain protection. There are also administrative procedures available, including registering the mark with the U.S. Patent and Trademark Office, that can be used to strengthen the protection.
Trademark owners have the right to prevent others from using the same mark and also have the right to prevent others from using similar marks that create a likelihood of confusion about the source of the product. In other words, you can prevent a competitor from using a mark that is so similar to yours that it might make consumers think that your competitor’s products are somehow affiliated with your company.
Learn more about trademarks by visiting the Trademark Basics Page.
A copyright is a form of legal protection that protects creative works, such as books, songs, photographs, paintings, computer software, drawings, and any other creative works. A copyright protects the expression contained in the work, not any underlying themes or storylines.
A copyright attaches automatically as soon as an expressive work is in a fixed form. Thus, as soon as a document is written or a song recorded (or the music written), it is entitled to copyright protection. There is no requirement to register a copyright or even to include a copyright notice.
Copyrights grant their owners the exclusive right to reproduce the work, create derivative works, distribute copies of the work, and publicly display or perform the copyrighted work. It is important to recognize that copyright protection is different from ownership of a physical product. For example, a person who buys an original painting does not generally obtain the right to make copies of the painting.
Although you are not required to register a copyright, there are advantages to doing so. Among other things, you cannot file a lawsuit in federal court to enforce your copyright until it is registered. Moreover, if you register your copyright before another party begins to infringe on that copyright, you will be entitled to special forms of damages and may be able to recover fees and costs if you have to sue. Thus, you should register any creative work that you anticipate you might want to protect at the earliest possible juncture.
Learn more about copyrights by visiting the Copyright Basics Page.
Trade secret law protects confidential business information. Companies often use trade secret law to protect recipes, formulas, customer lists, and other data compilations. One of the most famous examples is the recipe for Coca-Cola. The Coca-Cola Company has maintained the secrecy of its cola recipe for over a century. In fact, according to recent reports, there are only two employees who know the recipe, and the written copy is stored in a vault in an Atlanta bank.
Trade secrets arise automatically as a matter of law as long as companies take reasonable steps to protect the confidentiality of the information. As long as the company takes reasonable steps, its information will be protected.
Trade secret disputes generally arise when an employee leaves to work for a competitor and seeks to use confidential information at the new venture. Where an entrepreneur has taken reasonable steps to protect the information, employees who leave are prohibited from using that information to build a competing business.
Learn more about trade secrets by visiting the Trade Secrets Basics Page.
Click on the links below to navigate between pages of intellectual property resources.