IP Q&A for today’s knowledge economy
Does my business own the intellectual property created by my employees?
This depends on the type of intellectual property created by your employees. For example, patents are automatically owned by your employees absent a written agreement otherwise. Copyrights, if they are created within the scope of the employee’s employment, are owned by the employer. You should consider requiring your employees to enter into written agreements assigning to your company any patents the employee develops during their employment that are within the scope of their employment.
What is the difference between patents, trademarks, and copyrights?
There are generally two types of patents: a utility patent protects a product or process that is new, non-obvious, and useful. A design patent protects the new look or design of a product. In contrast, a trademark protects branding and works to indicate the source or origin of goods or services, and reduce consumer confusion. A copyright protects expressive works like art, literature, and music. Keep in mind that patents and copyrights expire, but trademarks can potentially remain active perpetually if they are continuously used correctly in commerce and protected. Your IP attorney can use the duration of protections of patents, copyrights, and trademarks to craft an overall IP strategy for the lifetime of a product.
What should I plan to do with patents, e.g., enforce (sword) or simply act as a shield?
As a sword, a patent can be enforced against a competitor who seeks to exploit some aspect of your intellectual property in violation of your rights. This attack may be, for example, a lawsuit to prevent the competitor from using the patented technology, or a demand that they pay a royalty for the right to use the patented technology. As a shield, patents can protect you from the attacks of your competitors and safeguard some protection in using your technology. But patents are also an asset class and can be used most effectively if you understand their short and long-term values. In addition, it may be advantageous from a commercial perspective to tout novelty as evidenced by the existence of a patent.
How should I protect our new technology if it is intended for long term vs. short term use?
Patents expire after 20 years. If the technology is intended for long-term use, for example, more than 20 years, consider if it can be kept as a trade secret. If the technology can be reverse-engineered it is not a good candidate for a trade secret and there are also other drawbacks to using trade secrets to protect your intellectual property (see “Should I keep my idea as a trade secret or file a patent?” below). If the product has a very short-term use, for example, less than 5 years, you should consider the value of having the product “patent-pending,” even if a full patent isn’t economically viable for the lifespan of the product.
How will prosecuting/maintaining the patent impact profitability of our product?
A patent can make a product more profitable by giving you a strong market position and competitive advantage, provide a higher profit than a non-patented product, offer additional income from licensing, diminish the risk of infringement, and enhance your ability to raise funds at a reasonable rate of interest. Patents can also add value to the business in the event of an asset sale or similar business transaction. However, the cost to prosecute and maintain the patent needs to be balanced against these benefits. For example, you should consider if the expected profits from an exclusive position in the market justify the costs of patenting. Also consider if it will it be easy to identify violation of the patent rights and if it will be easy to design around the patent. When budgeting for patent, keep in mind costs of a prior art search, official filing fees, patent attorney fees, maintenance or renewal fees, and if needed, foreign patent fees.
Should I keep my idea as a trade secret or file a patent?
Trade secrets have several advantages over patents, including no registration costs, no disclosure requirements, and no time limitation. Trade secrets are not appropriate for products that can be reverse engineered, and trade secrets only protect your trade secret from improper acquisition. Trade secret does not protect you from a third-party independently developing a product that includes your trade secret. The third-party may even be able to patent the trade secret that they independently develop.
Why should I file a provisional patent application if I have a non-disclosure agreement?
The process of going to court to enforce an NDA is costly and time-consuming. And suing someone who makes a disclosure in violation of your NDA doesn’t undo the disclosure, which could be an obstacle to patent protection. NDAs aren’t foolproof methods to protect patent rights. Filing a provisional patent application secures a filing date. This allows disclosure of the subject matter of the provisional application without loss of patent rights.
Why should I file for a federal trademark registration?
A federal registration gives you several benefits: (1) listing in the US Patent and Trademark Office’s database of registered and pending trademarks which provides public notice to anyone searching for similar trademarks; (2) a legal presumption that you own the trademark and have the right to use it; (3) the right to bring a lawsuit concerning the trademark in federal court; and (4) the option to separately register your federal trademark registration with the US Customs and Border Protection, who can stop the importation of goods with an infringing trademark. The costs are typically very reasonable compared to the substantial benefits a federal trademark registration offers.
What is the difference between ™ and ®?
The “TM” designation is used for a mark that is used as a trademark but is not registered. The “circle R” designation can only be used for federally registered trademarks. The use of the circle R to designate federal registration may be an additional deterrent to keep others from using your trademark or a trademark that is similar to yours.