The main problem that I see with inventors is when they want to use the cheapest form of Intellectual Property (IP) protection. Inventors need to realize that each form (i.e., patents, trademarks, trade secrets and copyright) protects an idea in a different way and is used for a different purpose. It is important to not cut corners and settle for any form of IP protection but rather to get the form of IP protection that best suits the inventor’s need. Otherwise, the inventor will not be able to stop others from competing against them.
There are four main types of intellectual property rights that can be secured to protect an idea, invention, proprietary information, or work of art, and each type of protection provides coverage differently. In this chapter, a brief overview of trade secrets, trademarks, and copyrights as well as an extensive treatment of utility and design patents are discussed.
Most products can be protected by multiple types of intellectual property rights. Take, for example, a can of Coca-Cola®. The brand, “Coca-Cola,” is a trademark. The formula for the actual soda is a trade secret, while copyright protects the packaging art. The shape of the Coca-Cola® bottle is protected by both (1) a design patent and (2) a trademark (i.e., trade dress). Accordingly, it is important to parse out which aspects of the invention or idea are suitable for patent protection, trademark protection, or copyright protection and which aspects of the invention or idea should be protected by trade secrets.
Table 1 below offers a simplified way of remembering each type of protection and what it protects.
A “trade secret” includes any valuable information that is not publicly known and for which the owner has taken, “reasonable”5 steps to maintain its secrecy. Trade secrets are not registered with a governmental body. Rather, their owner must prove in court when suing someone for trade secret misappropriation that the information fits the definition of a trade secret, given above. Trade secret protection lasts until the information is no longer valuable, the information is not secret, or the owner does not take reasonable steps to maintain its secrecy.
Table 2 below delineates each type of protection and the major differences between them.
Trade secret law specifically protects the misappropriation of trade secret information. This means that a wrongful or nefarious act must accompany the acquisition of the information. For example, if someone acting as an imposter steals the trade secret information from its owner, the owner can sue the imposter for misappropriation of trade secrets. However, if the owner voluntarily gives trade secret information to an individual without limitation, there has been no misappropriation and the owner cannot sue. It is also possible that the information may lose its status as a trade secret. This can occur if there has been a lack of reasonable effort to keep the information secret and/or the information is de facto no longer a secret.
Trade secret protection is not appropriate in the long term for ideas that can be readily ascertained by reverse engineering or for inventions that can be independently created because, again, if there is no nefarious act that accompanies the acquisition of the information, there is generally no misappropriation or wrongful appropriation of the trade secret information.
Trade secret protection may be optimal for ideas and inventions that can be used secretly and cannot be reverse engineered (e.g., recipes). Generally, trade secret protection is not optimal for mechanical or software products since both utilize a user interface that is available to the public and can therefore be reverse engineered. Most inventions start off as trade secrets. Inventors are often initially hesitant to reveal their inventions to others, including their patent attorney, and I respect their attempts to maintain the secrecy of their inventions.
Besides the invention itself, other aspects related to the business may be protected as trade secrets. For example, the business plan and computer-aided drawings of the invention (including, but not limited to, its tolerances and critical-sizing aspects) may not be eligible for patent protection but may be protected by trade secret. However, the invention will eventually be marketed and will no longer be a trade secret. As such, other forms of intellectual property (i.e., trademarks, copyrights, and patents) should be filed so that competitors do not copy the idea without authorization.
Trademarks protect brands. The inventor may have a name that will be associated with the product or a service mark associated with a service, which are called trademarks. Since the laws for both trademarks and service marks are similar, I will refer to all the above as products and their trademarks for simplicity. A trademark is anything by which customers can identify the product or the source of the product, such as a name associated with the product. Other source identifiers that can be protected by a trademark include sounds, colors, smells, and anything else that can bring the product and/or its owner to the minds of a consumer. The most common types of trademarks are word-marks, logos, and slogans. If the product configuration (e.g., shape of Coca-Cola® bottle) or packaging (e.g., Tiffany’s blue packaging) are nonfunctional and recall the product’s maker (i.e., source of the product) in the mind of consumers, the configuration can be protected and registered as a trademark.
The order in which trademark protection should be sought begins first with the wordmark, then the stylized words, logos, and slogans. The wordmark refers to a word, or set of words, associated with a product that does not have a design element attached to it (i.e., standard character mark). If the wordmark is registered without reference to the design elements, infringement would occur even if a competitor used a different design element but still used the same wordmark. The wordmark is the most important trademark registration to secure because competitors tend to infringe on, or copy, the words of the wordmark and not the design elements associated with the wordmark. This is especially common in the current online and text-based world. It is therefore usually a priority to protect the plain wordmark with a trademark registration before the stylized version of the wordmark, slogans, or logos (but if additional funds are available, one can file additional trademark applications for the wordmark with design).
Trademark rights can be acquired by using it in commerce. Sales of the product or service give the seller or manufacturer the right to claim ownership of trademark rights of the wordmark. These are granted based on “common law trademark rights.” Common law trademark rights are acquired by operation of law without any registration process. The problem with relying on such rights is that the trademark owner must prove ownership of the mark in a court of law if the trademark owner wishes to sue for trademark infringement. This can be difficult to do, and the burden is on the trademark owner to retrieve old records of sales, advertisements, and whatever else may be needed to prove ownership based on common law trademark rights. With federal or state trademark registration, the registration certificate (see Appendix D) shows prima facie (accepted as correct until proven otherwise) evidence of trademark ownership in the mark.
Although not required, it is beneficial to register a federal trademark with the USPTO when starting a business or launching a product because, as prima facie evidence of the registrant’s ownership of the mark, it establishes validity of the registered mark as well as exclusive rights to use it in commerce. Moreover, registration allows the trademark owner to slowly expand geographical use of the mark. For example, if the trademark is not registered and the trademark owner uses the mark commercially only in California, the trademark owner has no trademark rights in other states unless the trademark owner uses the mark commercially in those other states. With a federal trademark registration, trademark protection extends throughout the United States and its territories as of the filing date of an application regardless of the extent of its actual geographical use and given the trademark application matures into a federal trademark registration. Trademarks can also be protected by a state trademark registration process through the Secretary of State. However, state trademark rights provide protection only throughout the state where the trademark is registered and not throughout the entire United States.
Trademark rights last until the trademark owner abandons the trademark rights. To find out more information about trademarks and their registration process, see Appendix A.
Copyrights protect original works of authorship that are fixed in a “tangible medium of expression.” This means that the authored or creative work has been written down on a piece of paper, saved on an electronic storage device (e.g., hard drive, flash drive), or preserved in some other tangible format. Examples of copyrightable works include movies, videos, photos, books, diaries, articles, and software. Copyright does not protect ideas or useful items, which is the function of patents. Although software is a functional item, it can be protected by copyrights due to the creativity in the selection, ordering, and arrangement of the various pieces of code in the software.
Copyright law does not protect functional features of products such as the mechanical clicker mechanism as discussed in Chapter 1. In fact, when a functional feature is integrated with an aesthetic design, the aesthetic design may not be protected by copyright. For example, if there are aesthetic design elements of a belt buckle, they may not be protectable by copyright because the aesthetic elements are said to be fused with the functional feature. However, it could be protected by a design patent (discussed below), which is not limited in this way.
Authored works are automatically copyrighted at the time they are fixed in a tangible medium of expression. For any work created on, or after, January 1, 1978, the term of copyright protection is the entirety of the author’s life plus seventy years after the author’s death. For works made for hire as well as anonymous and pseudonymous works, the duration of copyright is ninety-five years from publication or 120 years from creation, whichever is shorter.
Registration is not required, but is advantageous to secure. If a copyright application is filed within three months of its publication or prior to the start of infringement, the copyright owner may seek statutory damages of up to 150,000 dollars in federal court, plus attorney’s fees, from the infringer. This often makes litigation financially unattractive for the copyright infringer. Without copyright registration, each party pays their own attorney’s fees and the damages are limited to actual damages, which may be significantly less than statutory damages. This often makes litigation financially unattractive for the copyright owner.
Three types of patents may be registered: utility, design, and plant patents. Plant patents are directed to asexually reproducing plants. Since this is a highly-specialized topic, it will not be covered below.6 If the invention is described in terms of its function or utility, a utility patent application would be the best type of protection. Utility patents protect inventions encompassing new functional features incorporated into an existing product or a new functional product as well as novel methods (for example, manufacturing techniques). If the invention is described in terms of its aesthetics, a design patent application would be the best type of protection. The design patent application protects the ornamentation, sculpture, pattern design, layout, and other aesthetic features of a product.
It is possible for one product to qualify for multiple types of intellectual property protection, and “stacking” them may be useful.
For example, a Coca-Cola bottle can be protected with multiple intellectual property rights. The shape of the bottle can function as a trademark, which is referred to as the trade dress. In addition to qualifying for trade dress trademark protection, the product’s shape can also qualify for design patent protection. The printed design on the bottle qualifies for copyright protection. Also, the technology used to make the bottle can qualify for utility patent protection. Applying for multiple intellectual property rights on one product may provide comprehensive protection. However, if funds are limited, it may be best to seek the type of intellectual property rights that best match the product.
Strategy for utility patent protection
The recommended strategy for protecting an invention with a provisional or nonprovisional utility patent may depend on a number of factors. For example, the funds that the inventor is willing to invest, the importance of having an issued patent rather than patent pendency, and the developmental stage of the product. Although other factors exist, these three generally dictate whether a provisional or nonprovisional utility patent application should be filed. To understand how these three factors might change the strategies for patent protection, a brief introduction to provisional and nonprovisional applications is necessary.
Provisional and nonprovisional utility patent applications
Utility patent applications can be filed as provisional patent applications or nonprovisional applications. The primary difference between the two is that the provisional application merely establishes a priority date (i.e., filing date) for the subject matter it discloses.
If two inventors file separate applications for the same invention, the one who filed first is given priority over the second when granting the patent. If nothing is done after filing the provisional patent application, it will be abandoned twelve months later and the information about the invention contained in the provisional patent application will no longer be patent pending. To maintain pendency on the information or priority for the filing date of the provisional application, the inventor must file a nonprovisional application within the twelve-month period and claim priority back to the provisional patent application.
The nonprovisional application similarly serves to establish a priority date for the subject matter disclosed. However, a nonprovisional application also enters a queue for examination. The nonprovisional application is only abandoned if a patent applicant fails to submit a response to an office action made by the USPTO. Any subject matter shared by the nonprovisional patent application and the provisional patent application will have the same priority date. (For more detailed information about provisional and nonprovisional applications, see Section 2.)
Strategic Factor 1 for utility patent protection: monetary funds
The provisional patent application is a lower-cost option for filing a patent application. As such, if cost is an important factor, a provisional patent application should be filed instead of a nonprovisional application to minimize legal costs. As explained above, it is important to remember that the provisional patent application only secures patent pendency of the inventor’s idea for twelve months. A provisional application does not enter the queue for examination and does not provide any enforceable patent rights that can be used to sue another for damages or seek an injunction.
Strategic Factor 2 for utility patent protection: time frame for securing a patent
The provisional patent application can also be utilized to delay the expenses of the patent application examination. As stated above, a provisional patent application does not enter the queue for examination and is automatically abandoned twelve months after its filing.
If the inventor primarily seeks patent pendency rather than the issuance of the patent, a provisional patent application can initially be filed to delay the application from entering the queue for examination for up to twelve months, which in turn delays examination costs by twelve months.
However, if the ability to assert a claim against others or show potential licensees what has been protected is important to the inventor, the nonprovisional patent application should be filed instead of the provisional utility patent application. This way the patent application will enter the queue for examination as soon as possible. After the nonprovisional patent application is filed and enters the queue for examination, the USPTO examines the patent application on a first come, first served basis (see Chapter 7). It normally takes one to three years for the inventor to receive the first office action from the USPTO.
If an inventor does not want to wait that long, he or she may file the application along with a prioritized examination request for an additional fee. This typically reduces the wait time for the first office action to roughly six months.
In sum, the provisional patent application and the prioritized examination request make the timeline of a patent application process more flexible. They can be utilized to design a shorter or longer time frame that is more suitable for the inventor’s manufacturing and marketing time table.
Strategic Factor 3 for utility patent protection: development stage of the product
It may be better to file a provisional utility patent application instead of a nonprovisional application if the idea or point of novelty is not yet fully developed. However, for inventions that have a clearly defined point of novelty, an inventor may consider filing the nonprovisional application to have the invention examined by the USPTO for patentability. If an inventor has built a prototype and conducted sufficient tests that satisfactorily prove its functionality (i.e., proof of concept) and marketability, he or she may wish to file the nonprovisional application and enter the queue for examination on the invention.
The provisional patent application is more suitable for less developed ideas because it allows the inventor to alter and include additional information in the patent application before examination by the USPTO. The provisional application should include a description of the invention up to its current point of development. The inventor then has twelve months to further develop the idea, build prototypes, and test functionality. Before the twelve-month period expires, the nonprovisional application must be filed with priority claimed back to the provisional application. The inventor may add information learned during the twelve-month period in the nonprovisional application. It is important to note that only the original information in the provisional patent application receives priority of the filing date of the provisional patent application. The new information (added when filing the nonprovisional application) receives a priority date of the filing date of that nonprovisional patent application.
It is also possible to file multiple provisional applications with improvements as the inventor develops the product during that twelve- month period. At the end of this period, all additional information contained in these various provisional applications is filed collectively in one nonprovisional application. In this way, only one nonprovisional patent application ultimately enters the queue for examination. The benefit of doing this is that the inventor avoids separate, nonprovisional applications and avoids unnecessary costs of multiple nonprovisional patent applications.
Even if the ideas for a utility patent are fully developed and the product is ready for marketing, the inventor may still benefit from filing a provisional application because it delays examination. After filing the provisional application, the inventor may test the invention in the market. This testing period may clarify the importance of certain features or evince problems of the original version of the product. The inventor may then include this new information in the nonprovisional application when it is later filed. The information added to the patent application should be directly related to the point of novelty to warrant the expense of an attorney’s time to amend the patent application. In this way, the provisional application provides flexibility and control in what will ultimately be examined by the USPTO for patentability.
Side Note: I have insisted that correctly identifying the point of novelty is essential for determining the types of intellectual property used to protect the invention, drafting the patent application, and prosecuting the patent application before the USPTO. However, one should not cling too tightly to a specific point of novelty. If during research, development, or marketing, the inventor feels that the original point of novelty has changed or is already known, the strategy in prosecuting and securing the patent should also be adjusted according to that new information.
Strategy for design patent protection
Design patent applications protect ornamental features, unique design elements, or patterns of a product. The term for design patents is fifteen years upon the issuance of a design patent, whereas the term of a utility patent is twenty years upon filing. Unlike the straightforward patent term calculation for design patents, the patent term for utility patents is more complicated to calculate because it is contingent on (including, but not limited to): the filing of a provisional application, payment of maintenance fees, patent term adjustments, terminal disclaimers, etc. Design patent applications generally have a higher “allowance rate” than that of utility patent applications—a higher number of design patent applications mature into a patent compared to utility patent applications. However, because design patent applications protect the ornamentation and not the function of an invention, competitors can easily avoid infringing on design patents than utility patents by simply making their products look different. Design protections are therefore only useful in limited situations. However, limited usefulness does not necessitate ignoring them. Below are a few situations in which a design patent may prove very useful.
Situation 1: to block importation of overseas manufacturer overruns
Design patents are useful for blocking the sale of counterfeits, the importation of overrun (i.e., excess production), or rejected products manufactured overseas for the inventor. These imports will be identical to the drawings in the design patent and, if imported into the United States, may be blocked by Customs. If these products are allowed into the United States, the importers, distributors, users, or manufacturers may be sued for infringement.
Situation 2: furniture
Design patents are also useful for furniture lines and other products sold in sets because buyers must purchase products that look like the original product to maintain complete sets. Doing otherwise would create aesthetically displeasing groupings of products that a potential consumer would not be interested in when expanding their current set.
Situation 3: large market leaders
Design patents may also be useful for large manufacturers that are leaders in their market. For example, Apple, Inc. obtained several design patents on different parts of its iPhone including the housing and arrangement of icons on the display. Apple, Inc. won a lawsuit against Samsung for design patent infringement when Samsung put out its own version of a smartphone with a similar design in the United States.
5 “Reasonable” steps differ based on the value of the trade secret—the more potentially valuable the information, the more steps must be taken to secure its secrecy. For example, reasonable steps to maintain the secrecy of the Coca-Cola formula would be higher than reasonable steps to maintain the secrecy of the customer list of a local injection molding company. Reasonable steps for the local injection molding company might include requesting all persons that have access to its customer list to enter into a confidentiality agreement. By contrast, to safeguard the Coca- Cola formula with only a confidentiality agreement may not be sufficiently reasonable. Because the value of the Coca-Cola formula is great, reasonable efforts would likely include the confidentiality agreement in addition to other steps including, but not limited to, dividing out manufacturing steps so that no one plant manufactures the Coca-Cola drink.
6 For inventions directed to a plant patent, I recommend seeking advice of a patent attorney specializing in plant patent since that is outside my area of competence.