Intellectual Property (IP) Basics

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Intellectual property (IP) is a general term for categories of rights in intangible creations of the mind. How can one own something intangible, much less protect it? Well, setting aside the fact that property rights generally are mental constructs based on relationships, a conceptual framework may be of aid. There are four main types of IP rights: patents, trademarks, copyrights, and trade secrets. (This overview will focus on IP under US law, primarily from a commercial perspective.)

IP is one of a company’s most valuable assets. Among other things, it builds brand awareness and loyalty among consumers, establishes protectable legal interests in goods and services as well as the technology and know-how used to produce them, and has intrinsic value that may be sold, licensed, or leveraged for profit. It is thus important for companies to understand, and also properly manage and protect. 

Patents 

Patents protect rights in useful inventions and discoveries, like machines and processes. A patent is a right granted by the US government to an inventor for a limited time to exclude others from making, using, offering for sale, or selling the invention in the US, or importing the invention into the US. Utility patents (including business method patents) are the most common types. A company obtains patent protection by filing an application with the US Patent and Trademark Office (USPTO). 

Trademarks 

Trademarks protect product, service, and company identifiers, like brands, logos, and package designs, in order to show which person or company is the source or origin of goods and services and distinguish the trademarked goods and services from those made or sold by others. Trademarks may take the form of names (as in Calvin Klein® apparel), brands (like Coke® soft drinks and Apple® computers or Intel Core™ processors), designs and symbols (think Nikeʹs “Swoosh” design on footwear), and slogans (such as De Beersʹ slogan A Diamond Is Forever®).

Trademarks may also take the form of color (the color of Owens-Corningʹs pink fiberglass insulation), sound (NBC Universal Mediaʹs chimes), scents, and package, product, or store design (e.g., the shape of a fragrance bottle or the interior design of a restaurant). Trademarks consisting of colors or package, product, or store designs, or combinations of these features, are commonly referred to as “trade dress.”

In the US, trademark rights arise from use, not registration. However, companies frequently protect their more valuable trademarks by filing for federal trademark registration with the USPTO since doing so provides many benefits, including the exclusive right to use the mark nationwide in connection with the goods or services covered by the registration, and the right to use the registered trademark symbol ® to discourage infringement. Unregistered trademark rights are limited to the territory in which the mark is actually used; companies may choose to signal unregistered trademarks with “TM”.

Copyrights 

This is the realm of expressive works, like art, music, dance, and literature, and also software. Copyright protects works of authorship that are fixed in any tangible form or medium of expression, and original in the sense that they are independently created by the author (or authors), and at least minimally creative. The “author” may be one person, or two or more persons (in which case the work is jointly owned by its authors). For a “work made for hire,” the employer or party that commissions the work is the initial owner of the copyright in that work, unless either of these parties and the creator of the work agree differently in a signed writing.

Copyright protects both published and unpublished original works of authorship, and covers a wide variety of literary, artistic, and cultural output. However it does not protect ideas, systems, methods, or processes, or US government works, or typefaces (although copyright protection is available for computer programs that generate fonts and typefaces).

Registration is not required to establish federal copyright ownership. However, companies frequently protect their copyrights by filing for registration in the US Copyright Office as registration provides substantial benefits, including the ability to bring an action for copyright infringement, and recovery of attorneysʹ fees and special categories of damages not otherwise available in an infringement action.

Trade Secrets 

A trade secret is business, financial, and technical information which is kept confidential by its owner through reasonable efforts, and has economic value because the information is not generally known. For example, Coca-Cola’s soda formula, KFC’s fried chicken recipe, and the source code of Adobe’s Photoshop® software are trade secrets.

Trade secrets are not registered like patents, trademarks, and copyrights. Instead, companies expect their employees to protect trade secrets by making reasonable efforts to keep this information confidential: for example, by never giving passwords to anyone, keeping hard copies of trade secret information in locked files or cabinets, and never giving confidential information to customers or other individuals outside of the company unless authorized by management and covered by a signed Non-Disclosure Agreement (NDA).

Fonville Legal Can Assist You

Effectively managing your company’s ownership and use of IP, whether in the context of enforcement, licensing, IP transfers, or dealing with employees and contractors, is a topic for another article – or a phone call with your lawyers. If you are interested in learning more about Fonville Legal or you’re ready to get an attorney’s perspective on your business’s intellectual property situation, we encourage you to contact us today! We look forward to hearing from you.