by Annette Yurchak (June 2006)
Intellectual property is an extremely valuable asset to companies of any size, and may be one of a small business’s keys to competitive advantage. Intellectual property is an intangible asset that can be bought and sold, and is currently responsible for about half of the USA’s economic growth. Unfortunately, sometimes the developers of intellectual property have their work plagiarized, re-branded, or even stolen without proper compensation for their hard work. Even if you are proactive about protection, there can be unscrupulous individuals who circumvent your rights on the edge of legality. This type of “design-around” prompted Bill Gates to comment that intellectual property has the shelf life of a banana. Of course, there are some basic protective measures you can undertake to reduce your vulnerability. Keep in mind that registered or not, you police potential violations yourself. Registration may serve as a deterrent, but defending your rights through legal action may be extremely expensive and the outcome is not always what you might anticipate. The three types of intellectual property protection are discussed below.
Copyright
A copyright is recognition of ownership of a work of artistic expression including literary, dramatic, musical, artistic, and certain other intellectual works. In most cases, copyright protection is automatic upon your creation the work, as long as you have some form of proof that you were the original creator. Taking the further step of registration enters the work & copyright claim into public record, and is necessary before an infringement suit may be filed in court. There is a wealth of information available on the U.S. Copyright Office’s website: http://www.copyright.gov/. This site offers clear, simple instructions for an individual to represent him/herself in the registration of a copyright; professional assistance is usually unnecessary.
Patent
A patent grants an original inventor with the right to exclude others from making, selling, or using one’s invention in the USA. Protection is offered for a limited time (usually 14-20 years) in exchange for public disclosure of the invention. The three types of patents are:
1. Utility - for discovery or invention of a new process, machine, article of manufacture, compositions of matter, or an improvement thereof.
2. Design – for invention of a new, original, and ornamental design for an article of manufacture.
3. Plant – for invention or discovery of any new and distinct variety of asexually reproduced plant.
Patents are registered with the United States Patent and Trademark Office (USPTO). While the USPTO does allow any individual to represent him or herself in the registration of a patent or trademark, these registrations tend to be difficult and require a much greater understanding of the rules involved in the specific registration processes. In most cases, an attorney with experience dealing with intellectual property is recommended. The USPTO maintains a publicly accessible registry of current Patent Agents and Attorneys. Beware of scam operations offering to patent your invention for you (they may steal money, your idea, or both). Always make sure you’re consulting a reputable service.
To save time and money, it is a good idea to consult the USPTO website to see if there are obvious hindrances to your registration. Visit http://www.uspto.gov/ to assist with your preliminary searches (see links on the left of the site for patent or trademark starting points).
Trademarks and Service Marks
A trademark protects words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and to indicate the source of the goods. Trademarks, unlike patents, can be renewed forever as long as they are being used in commerce. A service mark applies to a service rather than a product. The terms “trademark” and “mark” can be used to refer to both trademarks and service marks. These “marks” (or the symbols - ® & ™) prevent others selling their goods or services under the same name or logo as your business, but they do not prevent anyone from selling the same products or services under different names. There are three levels of trademark protection:
1. Common Law – created from the actual use of a mark in commerce; does not require official registration. Using the letters TM or SM after your trade or service mark notifies others of your claim to the “mark”. The general precedent is that the first party to use a mark in commerce has the “common law” right to that mark in that geographic area only.
2. Arizona Trademark - for businesses who have no plans to expand out of state or conduct interstate commerce. Scope of protection is limited to the State of Arizona and the process is fairly simple and inexpensive. For more information you can visit the Arizona Secretary of State website at: http://www.azsos.gov/business_services/tnt/.
3. Federal Trademark – pertains to “marks” that cross state lines. If you do business out of state (like online or mail order), then consider registering a federal trademark. This prevents anyone nationwide from using your registered trademark in commerce. This is the only registration that allows (and requires) you to use the ® with your mark. Registration is through the USPTO. It is usually advisable to have legal assistance with this more-complicated process.
For all levels of intellectual property protection, we recommend that you visit your local library or SBDC office for initial research. The Nolo Press website, at http://www.nolo.com/, is another good starting point to identify which intellectual property protection may be best for your business. Development and registration of intellectual property are areas of enormous economic growth worldwide, and in the USA, intangible assets accounted for 70% of corporate assets reported in 2000. Think about the future, your work & your brands, and decide how best to take part in that economic growth.