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FROM IDEAS TO PROFIT This article will outline some basic strategy and procedures that can and should be considered when protecting intellectual property. The author uses the term “product” to encompass the concepts of an invention or an idea. 1. “SMART Product Developers And Businesses File A Patent. Here’s why” From an investment and legal standpoint, a patent provides great competitive advantages. As a patent owner, you can legally exclude others from making, using or selling the invention and thus be the first on the market with a new invention, which greatly increases the chances of success. This also allows you to carve out a specific niche within an industry and detour competitors from trying to profit off your products and ideas. In addition, patents also allow you to generate revenue by licensing the right to make, use or sell the invention to other third party individuals or companies who in return will pay you a royalty. From a marketing standpoint, once you file a patent, you can use the term “patent pending” on any promotional or advertisement material. This can be an important point when attracting investors or manufacturers because they know that their investment in your invention will be maximized and protected. “Patent Pending” is also a great marketing tool that many businesses use to drum up publicity and increase value in the eyes of the general public. There are three types of patents: utility patents, design patents, and plant patents. Of the three, the utility patent is the most common and powerful because it protects how an invention works or functions. If a product has a unique ornamental appearance or design, then a design patent can be obtained to protect the overall appearance of the invention of product (e.g. Apple’s ipod design). Utility Patents can be obtained on a variety of things including, mechanical devices, chemical formulas, manufacturing processes, and business methods. Design patents can be granted on a unique and ornamental appearance of any invention so long as it is not functional. Utility patents are granted a limited monopoly of 20 years from the date of issue and design patents are given 14 years from the date of issue. After that, the patent falls into the general public domain. One major pitfall (though there are many) of not filing a patent or delaying in filing a patent is that you may be barred forever from obtaining one. U.S. patent law provides a grace period of exactly one year (six months for a design patent) after you market, sell or attempt to sell or publicly use the invention to file a patent application with the USPTO (United States Patent and Trademark Office). Many inventors and businesses fail to realize this and find out later that because of their public display of their idea at a trade show or in a publication, that they are barred from obtaining patent protection. 2. “BEFORE Developing Any Product, Perform A Patent Search. It Could Be The Best Investment You’ll Ever Make” In a nutshell, a patent search helps you not waste your development and investment dollars. The first step in the patenting process is to have a professional patentability search completed to determine if your invention is patentable. For example, a search might reveal pre-existing patents or “prior art” that would prevent you from obtaining a patent on the product in whole or in part. Without knowing this at the outset, an ill-prepared business or individual, may waste time and resources into developing a product, later to realize that it infringes an already existing patent or is not capable of patent protection. A search can also benefit you by acquiring the knowledge gained before you. Indeed, the patent law system itself was created for the purposes of encouraging creativity and improving on what has come before. In exchange for the inventor making public the information regarding the useful invention, the government provides the owner a limited monopoly whereas he/she can exclude others from making, using and selling the patented invention. Improving on what has come before is always easier and more economical than re-inventing the wheel. Thus a patent search may actually save time and money by allowing a business to benefit from the teachings of past patents, whereby allowing the business to concentrate instead on its efforts to improve on a current pre-existing technology, instead of re-inventing it. Lastly, in order to maximize the results of the patent search, the author recommends proper review by a patent attorney who can discern the specific nuances of the search and provide an objective opinion as to results of the search. 3. “Trademarks: Protect Your Product Or Business Name And INCREASE The Value of Your Brand” Trademarks are words, phrases, logos, slogans that identify a product or family of products. Trademarks help distinguish and identify a product with a particular source. Trademarks grow stronger as a company builds goodwill in the mark and continues to use its trademarks on particular goods and services. There are four categories of marks; generic, descriptive, suggestive and fanciful. Generic marks are words or phrases that are so general in its nature that they cannot be registered as trademarks. They tell or describe exactly what a product is, e.g. ice cream, or has been used in such a general manner that it has loss its distinctiveness, i.e. aspirin. Generic marks are not afforded any protection. Descriptive marks describe some feature of the product, e.g. “ChapStick” for a skin preparation in a stick. Descriptive marks may or may not be protectable, depending on many factors, such as “secondary meaning” or in other words, evidence that consumers over time have come to identify the product with a particular source. Descriptive marks that cannot be registered on the Principal Register of the United States Patent and Trademark Office (“USPTO”), may be registered on the Supplemental Register. However, the Supplemental Register does not afford as many rights as does the Principal Register. Suggestive marks do not describe a product but instead requires the consumer to make a leap of logic to identify the product, e.g. “Jiffy Lube” for an oil change service establishment. Suggestive marks are the second strongest of marks and are usually registered on the Principal Registered and can provide broad protection, thereby making them more valuable than descriptive marks. Sometimes the lines between a descriptive mark and suggestive mark are not clear. There have been many disputes with the USPTO and in the courts over this issue. If you have the opportunity, it is better to select a mark that has few descriptive characteristics at all. Lastly, fanciful marks offer the best protection. Fanciful or arbitrary marks are words or phrases that have no relation to the product at all, i.e. “Apple” for personal computers, “Nike” for sports apparel and accessories and “Exxon” for fuel and gas. Fanciful marks are harder to initially conceive and may require more investment and time in getting consumers to identify the fanciful mark to a particular source. However, a fanciful mark, over time, may become so ingrained in the minds of consumers that it has eclipsed the value of the underlying product. Just try to imagine the worth of a mark such as the “Exxon” or “Nike” name. 4. “Perform A Trademark Search: Why A Few Hundred Dollars Can SAVE You THOUSANDS, Perhaps MILLIONS.” As with patents, a trademark search should be performed before any product name is launched and/or used. A trademark search minimizes the risk of adopting a mark that is the same or similar to a mark that is already in use by another. The cornerstone of a trademark infringement lawsuit is that one mark is so similar to another’s mark that it is “likely to cause confusion” among the minds of the consumers. This confusion can be caused in several ways, such as the appearance, sound, or spelling of the mark. Important factors when determining the likelihood of confusion question also include whether or not the contested marks are within the same geographic area and/or deal with the same goods or services. Generally, trademark searches are relatively inexpensive, costing only a few hundreds of dollars to initiate and perhaps a little more to have a trademark attorney properly review the results of the trademark search. However, the initial costs of finding out whether a mark can be legally used far outweigh the potential liability and losses associated with the improper use of a mark. 5. “Trade Dress: Protect The Look and APPEARANCE Of Your Product’s Size, Shape and Design.” Trade Dress is a within the same category as Trademarks and is a term to refer to the totality of the elements in which a product or service is packaged. In contrast, a typical trademark or service mark protection is narrowly focused on a particular symbol, mark, word or slogan. Trade Dress however, has a broader scope which looks at the overall image of the product or service. A trade dress or the overall appearance of a product or service serves a critical function in commerce. Trade dress, similar to Trademarks, enables consumers to identify products so that they may make repeat purchases of products that have satisfied them, and avoid making purchases on products they dislike, ultimately benefiting the customer by reducing their search time and costs. Indeed, Trade dress protection can be obtained on a variety of different products or appearances. For example, the author recently obtained trade dress protection on the interior decor of a food service establishment (U.S. Reg. No. 3,106,012). Other examples of protectable trade dress include the shape of the famous Coca-Cola Bottle as well as the decor of a restaurant. However, Trade Dress protection does not extend to ‘functional’ aspects of products, which is the province for Patent law. Second, the subject of Trade Dress protection must be used as a source identifier or in other words, help the owner distinguish its good/services from other competitors. Third, the Trade Dress must act as source identifier similar to a trademark. 6. “REGISTER That Copyright To Enforce Your Rights.” Copyrights protect the writings of an author or artist/designer. They protect the form of expression, not the subject matter or content. Examples of copyrighted material include; books, magazines, newspaper articles, artwork, sculptures, songs and song recordings. Under current U.S. Copyright law, a work is “copyrighted” the moment it is “fixed” in any “tangible medium.” In other words, the moment the work is completed, a copyright arises and no copyright notice is required. When a work is published, it is highly recommended for an owner to include a notice, such as the symbol ©. This notice strengthens protection by warning others and can help the owner get damages in the event of infringement. However in order for an owner to sue for copyright infringement suit in federal court and obtain actual damages, profits and statutory damages, the copyrighted material must be registered with the Copyright Office of the Library of Congress in Washington D.C. Thus, to maximize and take full advantage of the U.S. copyright laws, every owner should include the © notice on all works and register the work with the U.S. Copyright Office. 7. “TRADE SECRET: Under Lock And Key” Trade secrets are information that companies keep secret to give them an advantage over their competitors. A Trade Secret can protect a wide range of information, including: formulas, recipes, software code, pricing information, client information; business methods, and processes. The formula for Coca-Cola is the most famous trade secret. While Patents, Trademarks and Copyrights require the disclosure of the information to the public; Trade Secrets require the direct opposite and require that the information remain confidential and not public knowledge. A major advantage of a Trade Secret is that it provides the owner with potentially perpetual rights in the information as opposed to 14 or 20 years (Patent) and 100 years (Copyright). Trade Secret information remains protectable so long as the information is not independently discovered, not publicly known and not reverse engineered. Common steps in protecting Trade Secret information are limiting the access to the trade secret information to a select few and requiring those individuals to sign confidentiality non-disclosure agreements. Marking any Trade Secret information as proprietary may also help to protect the protected information. While it is possible to recover damages from illegal disclosure of trade secret information, once the trade secret information is revealed or released to the public, it is difficult if not impossible to reacquire or resume trade secret protection. Thus, trade secret protection is only as strong as the efforts used to protect and maintain it. CONCLUSION Based upon this article, one can see there are a myriad of options available for any entrepreneur, product developer and business owner to protect its products and ideas. Of course, different strategy and protection will apply on a case-by-case basis, thus one should consult an intellectual property attorney to discuss all available options in more detail. John D. Tran is a registered Patent Attorney before the USPTO and is admitted to practice law in the highest courts of California. Mr. Tran specializes in intellectual property litigation, registration and prosecution matters, and is a partner at the law firm of Buus, Kim, Kuo & Tran, LLP. Mr. Tran’s practice also focuses on assisting businesses and companies develop, maintain and protect their intellectual property portfolio and can be reached via his email at jtran@bkktlaw.com. |
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