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.
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.
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.
One asset that business owners often overlook (and undervalue) is the company’s intellectual property (IP). The World Intellectual Property Organization defines IP as creations of the mind — inventions, literary and artistic works, symbols, names, images, and designs used in commerce. The law recognizes four categories of intellectual property. We’ll spend some time with each of these in future posts, but here’s a quick overview to get started:
Patents protect inventions such as machines or processes. If properly registered with the US Patent and Trademark Office, patents provide inventors with an exclusive right to manufacture and market their invention. Federal patent protection lasts up to 20 years.
A trademark is a name, phrase, sound, or symbol used in connection with services or products. Think of Nike’s swoop or the phrase “Just do it.” Federal trademark protection lasts for 10 years after registration and can be renewed “in perpetuity.” Trademarks can also be established without formal registration. If a company creates a symbol or name it wishes to use exclusively, it can simply attach the TM symbol to identify and protect the mark under common law; however, it is easier (more cost-effective) to enforce federally protected trademarks in court).
Copyright laws protect written or artistic compositions such as books, poems, songs, or movies. A copyright protects the expression of an idea, but not the idea itself. The owner of a copyrighted work has the right to reproduce, sell, perform, or display the work to the public. An author can have a common law copyright without federal registration, but cannot sue for copyright infringement of an unregistered copyright. A copyright lasts for the life of the author plus another 50 years.
Trade secrets include formulas, patterns, devices, or compilations of data that give a competitive advantage in business. Unlike the first three categories, trade secrets are governed by state law. To protect the secret, a business must prove that it adds value to the company and that appropriate measures have been taken within the company to safeguard the secret.