“Intellectual Property” (IP) are those assets of a business that are intellectual–in other words, not physical–such as copyrights, patents, and trademarks. But many business owners mix up the different types of IP, which makes it difficult for them to ask the right questions & learn how to make decisions to protect their creations.
Here’s an explanation of five different types of intellectual property, so you understand where they come from, how they are protected, and the differences between each.
1. Copyrights are creative works that have been fixed in a tangible form.
For example, these may include writings, songs, photos, video, paintings, sculptures, or audio recordings. “Fixed in a tangible form” means that it isn’t just in your head or something you speak or perform—it has been saved in some physical way (which may include in an electronic form). When multiple people create a work together, they may hold copyrights over their part of the creation (such as the lyricist and the composer of a song), or they may jointly hold the copyrights, such as two authors who collaborate on the writing of a novel. The copyright is usually held by the person who created it—even if it was paid for by someone else—unless it was a “work for hire” (which carries specific requirements according to the laws of each country).
In the United States, you need to register your copyrighted work with the U.S. Copyright Office if you want to sue someone in court, or if you want to have access to statutory damages at a later time. The cost is minimal ($35-100) and many people can handle the paperwork online themselves. It’s a great idea to reserve this for works that are important to your business and over which you’ll likely to want to actually enforce rights, such as an ebook or series of videos that you’re selling online. Filing a copyright registration on every blog post and photograph is not cost-effective or reasonable, but you may gather them in a collection and register the copyright on the entire project.
There are other rights related to copyright that are honored in certain jurisdictions. The European Union recognizes “performers’ rights,” where performers have the right to prevent recording, broadcast, or recording reproduction of their performance, for fifty years after the performance. The United States does not recognize performance rights under current federal law. Most countries besides the United States also recognize the “moral rights” of the author, where even if the author has licensed or sold rights to their work, they still have a right to attribution and to take their name off the work if it would hurt the author’s reputation.
2. Patents are grants from the government that give you exclusive rights over your invention for a specific amount of time, in exchange for full disclosure.
The moment the patent expires (twenty years from filing in the United States), anyone else can make generic versions of your work. Patents typically cover inventions like machines, electronics, methods of production, software, methods of doing business, chemicals, and pharmaceuticals. An idea isn’t patentable by itself. It must be novel, not obvious, useful, and “reduced to practice” (someone skilled in your industry must be able to read your information and make the product). That’s why you can’t patent the idea of a Star Trek transporter—no one can use your transporter blueprint to build an actual transporter (yet.)
If you have a patentable invention, you need to file a patent application as soon as possible. This is because in most places, the person who wins a dispute when one arises is the person who was first to file a patent application. In the United States, you apply for the patent with the U.S. Patent and Trademark Office (USPTO), and the process takes quite some time—sometimes years before you even receive a response (an Office Action) from them. A patent can cost thousands of dollars in fees and you almost always need a patent attorney or patent agent to handle it for you, both because of the cost and because of the complexity of the language involved in the creation of claims and the other documents filed in the patent prosecution procedure.
3. Trademarks are words, symbols, colors, sounds, or smells that someone is using in conjunction with a product or service.
Examples include the name Pepsi, the Just Do It tag line, the Apple logo, or the shape of a Coca Cola bottle. In some ways, trademarks are not property, exactly, because trademark law is designed to protect consumers from confusion and counterfeits—not to reward businesses for their tag lines and logos. Unlike copyrights and patents, trademark protection can theoretically last forever, as long as the business is still using the trademark in conjunction with their product or service. Trademark rights are limited to the particular use, such as for marketing consulting or in the sale of folding chairs.
In the United States, you obtain trademark protections under state law as soon as you are using the mark in conjunction with a product or service. However, that trademark protection is only applicable where you are using it (which may be only that city or state). Some U.S. states have a registration system, but that is in place more to put the public on notice than to grant you any additional rights.
To obtain rights over greater locations, you must register your trademark. In the United States you register your trademark with the Patent and Trademark Office. While this system is simpler than a patent application, it does require the art of figuring out exactly what to trademark and which class (category) to select. In addition, you may need the assistance of an attorney to make that decision. A trademark registration application for one trademark in one class costs a few hundred dollars and typically takes six to eighteen months to complete.
4. Trade secrets are secret information used by a business that derives its value from being secret, and where the business is invested in protecting that secrecy.
Two commonly cited examples include the recipes for Coca Cola and for the KFC “original recipe”. Other types of common trade secrets include manufacturing processes, client lists, ingredients, systems, sales methods, launch strategies, and business plans. While it is difficult to protect the secrecy of a trade secret, the benefit is that the protection can theoretically last forever.
There is no registration system for trade secrets. You obtain and protect them through your efforts in keeping them secret, such as via non-disclosure agreements, security, and procedures. Each company must enforce rights over their trade secrets via cease and desist letters and lawsuits, or they will lose rights because the information will become public. In the United States, protection is provided mostly under state laws, usually modeled off of the Uniform Trade Secrets Act.
5. Right of publicity is defined as your right to control how your name, likeness, and persona are used by others.
An example is that I have the right to prevent my name and photo from being used to promote someone else’s service, unless they obtain my permission. This right is not recognized everywhere, and in some places is pieced together from other laws, such as in right to privacy laws, trademark law, and truth-in-advertising regulations.
Do you have a legal question related to your existing small business or your startup? Try a 15-Minute Quick Call with Elizabeth!