We’ve spent the past several posts exploring different types of intellectual property protection. While many businesses concentrate on protecting inventions, brand names, and customer lists, they sometimes overlook the need to protect their website. Owners often think solely in terms of copyright protection for website content, but other types of protection may also apply. Here’s a quick overview of the different types of IP protection that may be necessary.
PATENTS AND UTILITY MODELS
If your website is an online store with an e-commerce system, or has an internal search engine, it may be protected by a patent or a utility model. A utility model is similar to a patent in that it is an exclusive right granted for an invention which provides exclusive use rights for a limited period of time. The application process is less rigorous for utility models, but the protection period is shorter. Utility model protection is often appropriate for an incremental improvement rather than a wholly new invention.
PATENT OR COPYRIGHT
The software on your website, including the text-based Hypertext Markup Language (HTML) which allows web designers to create font, color, graphic, and hyperlink effects on web pages, may be protected by copyright and/or patents, depending on country in which you are seeking IP protection.
Your website design is most likely protectable by copyright, as is the site’s content, including written text, images, music, and videos.
Any business names, including separately registered assumed business names (DBA), logos, product names, and website names may be protected as trademarks.
Trade secrets include formulas, patterns, devices, or compilations of data that give a competitive advantage in business.
Behind the scenes elements in your website, such as source code, algorithms, programs, and database contents, may qualify as trade secrets provided that they have commercial value, are not disclosed to the user, and you take reasonable steps to maintain the confidentiality of such information.
Unlike patents, trademarks and copyrights, which primarily involve federal law, trade secrets are governed by state law.
Another difference is that no registration is required so long as the information to be protected is intrinsically valuable and reasonable steps are taken to preserve its secrecy. Essentially, trade secrets are a type of “do it yourself” intellectual property protection.
The Label “Trade Secret” Isn’t Enough
Small business owners should consider trade secret protections for any valuable information that is not otherwise known (or available to) competitors.
This information can be specific technical information about existing products, beta-testing, or prototype concepts for new products, sensitive business information regarding marketing and customer lists, as well as financial information such as costs and pricing.
For this type of information that is vital to your business’ success, you’ll want to make sure you take the necessary steps to safeguard it.
Preventing Unauthorized Use of Proprietary Information
The owner of a trade secret is entitled to prevent unauthorized use or disclosure of the information contained in the trade secret.
This means a business can require its employees and contractors (as well as vendors or suppliers and prospective business partners) to sign confidentiality agreements regarding trade secrets, and may enforce those agreements in court to prevent future use or disclosure and recover monetary damages.
How to Protect Trade Secrets
While there is no formal registration process, simply labeling something a “trade secret” is not enough to create an enforceable right to prevent its use or disclosure. The information to be protected must have some intrinsic value (i.e., it gives the business a competitive advantage).
In addition, the information must be secret. Information in the public domain, or which is readily available, does not qualify for trade secret protection. That means businesses must take commercially reasonable steps to preserve the secrecy of information that is claimed to be a trade secret.
Typically this involves internal practices such as limiting access, labeling items or information as “Confidential,” and using nondisclosure or confidentiality agreements to establish legal protections and restrictions for that information.
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Although commonly associated with literary, dramatic, musical, and artistic compositions, copyrights also apply to business (and personal) website copy, including blogs. There are statutory penalties for unauthorized reproduction (copying without permission or attribution), so even an accidental infringement can result in a lawsuit for penalties and attorney fees. And if an employee sends a copyrighted work to a client or customer, those individuals also could be targeted in a lawsuit by the copyright owner. The National Federation of Independent Businesses published a helpful article on copyright infringement which is summarized below.
Copyrights protect authorship of published and unpublished original works. You cannot copyright facts, ideas or systems, but the way in which they are expressed may be protected. A copyright technically protects a work the moment the work is created and set in a tangible form, but registering the work with the United States Copyright Office gives copyright owners greater protection. A copyrighted work may not be reproduced without permission from the copyright owner.
Always get permission to use copyrighted material
Find out who owns the copyright by searching the records at the United States Copyright Office (or have your IP attorney do so), then send a written request indicating how and why you wish to use the copyrighted material. For materials found online, ask the website owner.
Assume the work is copyrighted
Material may be subject to copyright protection even if you do not see the copyright © symbol.
Assume you’ll get caught
Many businesses pay for services to monitor unauthorized use of their copyrighted material. Don’t cut and paste without permission.
According to the United States Patent & Trademark Office, a trademark or service mark includes words, names, symbols, devices, or any combination thereof, used to identify and distinguish goods and services, and to indicate the source of the goods and services. In simple terms, a trademark is a brand.
COMMON LAW TRADEMARKS
It’s not necessary to file a federal trademark registration – simply putting the mark into the stream of commerce can create a common law trademark. But spending the time and money for a federal registration creates a legal presumption of ownership and gives the registrant an exclusive right to use the mark in connection with the goods and services listed in the registration.
While you can file a trademark application without a lawyer, it’s not a good idea. That’s because part of the application process involves checking to make sure that no one else is already using the proposed mark. A simple Google search is not enough. Trademark attorneys have access to specialized databases that will let you know ahead of time whether someone else has established rights in a mark – in other words, whether someone else could assert an infringement claim against your business if you use the mark. Since trademark application fees are nonrefundable (even if the application is denied), it makes sense to do your homework first.
DEFINING WHAT THE MARK WILL IDENTIFY
Before starting the application process, it is important to define the mark and the intended goods and services that will be identified by that mark. This will make your search of the USTPO database more useful and may simplify the application process.
If your application is approved and you receive a trademark registration, you will need to make sure that no one else is infringing on your mark going forward. While the USPTO tries to ensure that no other party receives a federal registration for an identical or similar mark for particular goods and services, it does not “police” trademark use. That means the owner of a registration is responsible for bringing any legal action to stop a party from using an infringing mark.
If you’re a small business, intellectual property protection can be expensive. This is particularly true for patents, which protect inventions. Here are five things that small business owners should know before spending the time and money to apply for patent protection.
1. You don’t need a patent to produce an invention.
Patents are not a requirement for bringing a new product to market. Instead, a patent gives you an exclusive right to prevent others from making, using, importing, or selling an invention that resembles yours. In simple terms, a patent simply gives you the right to file an infringement lawsuit against someone else.
That said, many patented ideas are not commercially successful. Before spending the time and money to patent your invention, consider current market conditions and ask yourself “What is the problem that my invention solves, and will anyone pay for the solution?”
2. A patent is a national right.
Patents only protect your invention in the country which issues the patent. That means your U.S. patent doesn’t provide worldwide protection. Obviously applying for additional patents abroad increases your expenses, so determine where you plan to sell your product. And just because you aren’t going to directly sell in a particular country doesn’t mean you shouldn’t file there, because you may be able to generate income by selling or licensing your patent rights in those countries.
3. Timing matters.
If you go to market with your invention before filing for a patent, you may lose your ability to patent it. In the United States, there is a one-year grace period to file for patent protection after entering the market. For all other countries, however, if you publish or offer your invention for sale prior to applying for a patent, you lose the right to protection. Also, patents are not permanent. In the United States, a patent expires after 20 years and no extensions are available.
4. Know the rules.
The standard for getting a patent is that it must be useful, novel, and non-obvious. As part of the examination process, the United States Patent & Trademark Office will look to see if the invention has ever been disclosed before. If so, the USPTO will deny the patent application. A patent also needs to stand up in court. Use a skilled patent attorney when filing your application. Patent lawyers are highly specialized and must pass a separate patent bar examination before they can practice.
5. Patents need not be used to have value.
A patent is an intangible asset, which means that even if it exists solely on paper, it can still have value. Patents can be sold or licensed, which means the inventor can still profit without having to invest in production and distribution. In addition, patents may improve your exit strategy by making your company more attractive to a potential acquirer.