One of the most important things to consider as you get ready to start your business, besides creating your business plan, is to protect your intellectual property. This term encompasses any branding aspects, designs, specific products, processes, and/or ideas, and the legal rights to use these.
You can protect your intellectual property by establishing trade secrets, trademarks, copyrights and patents.
However, the difference can be confusing. Not understanding these differences and how to go about them can mean that your assets are not properly protected.
So how can you protect your idea?
In this article, we’ll go through the four types of Intellectual Property (IP) to protect your idea
- Trade Secrets
What is a Trade Secret?
A trade secret is defined as a device or technique a company uses to manufacture its products. Trade secret is information a company holds that is not known to the general public that has potential or currently has independent economic value, has value to others who cannot obtain the information and has measurable and reasonable efforts put in place to maintain its secrecy. For Intellectual Property to be considered a trade secret, it must meet all of the above requirements.
If IP meets the criteria, it is protected under the Economic Espionage Act of 1996. The act made trade theft illegal under the two following circumstances:
- The act of theft must have had knowledge or intent that the act would benefit a foreign government, foreign government agent, or foreign instrumentality
- Theft is related to a product or service used or intended to use for in interstate or foreign commerce that will economically benefit others that are not the owner of the trade secret, and bring a loss or damage the owner of the trade secret.
Protecting Trade Secrets
Since trade secrets are already protected under the law, there are few steps a business should follow to protect their intellectual property.
- A business should identify what intellectual property needs protection and why. This can be done while keeping in mind what qualifies as a trade secret in the first place.
- Next, a business should limit who has access to the information and limit how many copies are made and distributed. Such documents should be labeled as “confidential” and only be access by personnel with the appropriate clearance to do so.
- Confidential information should be maintained in a secure place. Whether that is on a computer or filing room, the location should be monitored and protected with passwords or locks. Again, access should only be given to the necessary personnel or employees.
Lastly, a business should put policies and procedures in place to train employees on how to protect your trade secrets and also outline the consequences if trade secrets and information is mishandled. Most companies have non-disclosure and confidentiality agreements set in place to protect their assets and intellectual property.
What is a Copyright?
Put simply, a copyright is a legal protection of original ideas or expression. The legal term is pretty technical- a copyright is an idea or expression must be tangible and capable of being protected. It gives legal protection to creators and artists, which is why you hear more about copyrights in the music or art industry. Examples include motion pictures, sound recordings, games, drawings etc.
However, copyrights also extend into the business sphere such as legal documents, letters, emails, graphic designs, spreadsheets and programs. This means that the copyright holder will have ownership rights to such items within a business. Meaning, it will ensure that if your emails or designs are stolen, you may sue for infringement and damages. Additionally, when you obtain a copyright you have the right to announce it and provide notice that you own it, which adds an additional layer of protection since others cannot claim they did not know it was your intellectual property (IP).
A copyright will grant additional rights such as those to reproduce your work or content, display or perform your work in public, and create derivative works based on the original content.
What is Copyright Infringement?
A copyright infringement occurs when a person uses another copyrighted work without permission. Piracy is a form of copyright infringement. Downloading music, movies, using another person’s photographs without permission, and even copying software code without permission are all copyright infringement.
Once you produce a tangible work, the content creator or owner automatically has copyright protection- registration is not required. However, once you register for a copyright, you then have the ability to legally pursue infringements. Without registration, the ability to legally seek action is limited.
Filing for a Copyright
Filing for copyrights isn’t as complicated as it may sound. In fact, depending on what is being copyrighted you can file online with the U.S copyright office online, although there is a mail-in option as well. All you have to do is submit an application and send in non-returnable copies of the work. An application does not have to be filled out by an attorney, but an attorney could be useful.
The costs for filing for copyrights can be as little as $35, but may vary depending on the kind of work. An attorney can be helpful along the process but not required. A copyright lasts as long as 70 years.
Get Permission to use Copyrighted content:
To protect your startup, you should have an Intellectual Property Assignment Agreements. This allows your company to own the copyrighted material not the creator. This could be a question investors may ask you at your pitch.
Even if it’s blurry in the background, you’re legally supposed to have it signed off on. All the artwork on a set has to be cleared by the artist.Tami Cooper, President of Hollywood International Placements, Inc.
A trademark is a type of intellectual property regarding logos, designs, expressions or anything used to distinguish your business. In other words, a trademark is your brand. Registering your trademark can ensure that your brand is protected and that your slogans and logos cannot be stolen. Much like a copyright, it gives you ownership and legal rights when it comes to infringement. Both a copyright and trademark will protect your logo design, but a copyright will not protect your slogan.
Trademarks provide legal protection in two different ways:
- Protection from infringement. Much like a copyright, registering your trademark can give you additional rights to your work. It also gives a company an additional edge when it comes to standing out amidst their competition.
- It protects a business from fraud allegations such as others claiming that a business is using their name. The registration itself can give an owner the peace of mind.
Trademark infringement is a little trickier to prove than a copyright infringement. Infringement in this case only happens when the mark or brand is being used in the same market. In other words, the infringement has to be in competition with your brand. The infringement would have to bring confusion or potential confusion to customers. For example, if you have a t-shirt brand called Lemonzees and a competing t-shirt company calls themselves a similar or same name or uses any similar or same designs, slogans or logos, you may have an infringement case. However, if an ice cream shop pops up with the same name, you probably would have a trickier time proving infringement.
The same concept applies to location. If you have a company on the East Coast named “Boo’s” and a company with a similar name pops up on the West Coast, infringement protection laws may not apply to you. It is important to know however, that names or slogans can still be infringing if they have the same meaning or look the same- the marks do not have to be identical.
Once you can establish that you do indeed have a trademark infringement case, you can then move on to contacting an attorney to pursue it. Much like a copyright infringement, legal action and protection is very limited without registration.
Registering Your Trademark
A trademark is registered with the United States Patent and Trademark Office. Costs to trademark your business range from $225-$600 depending on the type of application you submit, whether it’s paper or electronic. You must also consider that your trademark is only valid for 10 years and you must submit renewal applications that range from $300-$400. An attorney’s help is not essential but his expertise can be helpful in guiding you through the process. If you are considering hiring an attorney, consider their legal fees in your budget as well.
A patent gives ownership of an invention or physical product/object. This means that a business or organization can have the sole right to manufacture, use or sell that item or invention.
Depending on your business and what you are looking to protect, there are three different types of patents that you can apply for:
- Utility Patent: These are usually granted for machines, chemicals, or processes.
- Design Patent: To protect designs or a unique appearance of an object.
- Plant Patents: These are for the creation of new hybrid plants and so on.
The two most common that you will see businesses apply for are the design and utility patent. The purpose of a patent is fairly straightforward: it protects your product or design from being stolen. However, the process of obtaining a patent or qualifying for one is a little more complicated than a trademark or copyright.
To qualify for a patent the innovation must be novel and nonobvious. For an invention to be novel, it must be different from other similar inventions in one or more parts. It can also not have been publicly used, sold or patented by someone else within the year of the file date. To qualify as a non-obvious innovation is a little tricky. This is determined by whether someone who is skilled in the field of the invention would consider the invention surprising and/or unexpected.
Things that naturally occur in nature, even if they are newly discovered, cannot be patented along with calculation methods, fundamental truths or mathematical methods. In other words, Newton’s First Law and a new element on the periodic table cannot be patented.
Lastly, you can not obtain a patent for ideas. There must be a concrete way for the idea to be implemented (i.e physical object or process).
The next step is to prove that your invention or product is useful. By useful, they mean it has to function in a way that produces the desired outcome for the purpose of the invention. Lastly, the applicant must describe in detail how the invention would be made.
Once these things are established, you can then start applying for the patent! An application must be submitted within a year that the invention was publicly announced or disclosed.
Provisional and Non-Provisional Patents
There are two types of patent applications that can be filed. A Non-provisional patent is all-inclusive. The United States Patent and Trademark Office (USPTO) will examine what is submitted and either accept or reject the application. The second type of application is the provisional application. This type of application is an initial application to simply start the process. The non-provisional application will still have to be filed within 12 months.
A provisional application is often cheaper and quicker to file. This is where we often see “patent pending” on products or inventions.
Applying for a Patent
The patent application process is more complicated than the copyright or trademark process. The assembly of the application package itself is very specific and has distinct rules that must be followed.
As can be seen, an application for a patent requires a high amount of detail. An attorney in this case could be extremely useful as they can help you with every step of the process. It is important to search the patent database extensively beforehand to see if someone else already has a patent for what you are trying to do. A patent attorney can help you with this step.
You can describe enough to show that you actually are hiding about 90% of the iceberg, in only showing that you’re able to do it but you don’t reveal how it’s done. The hiding of the iceberg ended up being my method of progressing.Daryl Gungadoo, Inventor
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About Raitchele Cornett
Raitchele (Hi-Chel-Ee) is from Curitba, Brazil, and grew up around entrepreneurs and business moguls.
Raitchele is a Boise State Alum and MBA Student with a passion for entrepreneurship.