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Jessica Chesher

Managing Editor


Innovation eReview
Feature Article - What is Intellectual Property?
by Eugene R. Quinn, Jr., Associate Director, NYS Science & Technology Law Center

One of the greatest challenges faced by all companies is the identification of intellectual property assets that are capable of being protected. This identification problem is not unique to start-up companies and small businesses, but it is quite common to see the problem more pronounced in these settings.  Even Fortune 100 companies have difficulties when it comes to identifying protect able assets.  The difference between the established market leader and the start-up is that corporate giants know that they are missing opportunities and periodically engage the assistance of experts to conduct training for their employees and to conduct intellectual property audits.  

The reality is that the people who are on the front lines frequently do not know what is capable of being protected.  Most front line researchers think they know what is protectable, which is where the problem come into play in its most pronounced form.  Researchers are too frequently looking past minor improvements that could be protected and only looking for the homerun invention.  To continue with the baseball metaphor, 3000 career singles gets you into the Hall of Fame in Cooperstown, but 400 plus homeruns over a career does not guarantee enshrinement in Cooperstown; a fact well known to Dave Kingman (442 career homeruns), and soon to be well known by both Fred McGriff (493 career homeruns) and Jose Canseco (462 career homeruns).  The lesson here is that building a formidable intellectual property portfolio does not require even a single blockbuster invention, although that would undeniably help.  The truth, however, is that setting out and looking for a pioneering invention will likely lead to frustration and economic failure, unless there is an attempt to identify, protect and exploit the numerous minor inventions and improvements that will be created in almost every laboratory setting.

With this in mind, we thought we would use the feature article this month as an opportunity to provide an overview of the broad intellectual property landscape in hopes of providing some basic information about the various core protections that are available.  In coming editions we will expand upon these topics to discuss various specific strategies relative to identifying, protecting and exploiting various forms of intellectual property assets.  Toward that end this article will act as a primer of sorts.

What is Intellectual Property?

Intellectual property is probably best thought of (at least in general terms) as creations of the mind that are given the legal rights often associated with real or personal property. The rights that are given are a function of statutory law (i.e., law created by the legislature). These statutes may be federal or state laws, or in some instance both federal and state law govern various aspect of a single type of intellectual property. The term intellectual property itself is now commonly used to refer to the bundle of rights conferred by each of the following fields of law: (1) patent law; (2) copyright law; (3) trade secret law; and (4) trademark and unfair competition law. Many people confuse these areas of intellectual property law, and al though there may be some similarities among these kinds of intellectual property protection, they are different and serve different purposes.

What is a patent?

A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office, which is a non-commercial federal entity and one of 14 bureaus within the Department of Commerce. There are three very different kinds of patents in the United States: (1) a utility patent, which covers the functional aspects of products and processes; (2) a design patent, which covers only the ornamental design of useful objects; and (3) a plant patent, which covers a new variety of living plant.  Each type of patent confers "the right to exclude others from making, using, offering for sale, or selling" the invention in the United States or "importing" the invention into the United States. It is important to note, however, that patents do not protect ideas, but rather protect only tangible or identifiable structures, methods and uses.

What is a copyright?

Copyright is a form of protection provided to the authors of "original works of authorship" including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. Copyright law generally gives the owner of a copyright the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly.  The copyright protects the form of expression rather than the subject matter of the writing. For example, a description of a machine could be copyrighted, but this would only prevent others from copying the description; it would not prevent others from writing a description of their own or from making and using the machine. In order to prevent the making and using of the machine one would have to obtain patent protection. Copyrights are registered by the Copyright Office, which is a part of the Library of Congress.

What is a trademark?

Generally speaking, a trademark is a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms "trademark" and "mark" are commonly used to refer to both trademarks and service marks.  Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a different mark. Trademarks used in interstate or foreign commerce may be registered with the United States Patent and Trademark Office.

What is trade dress protection?

Trade dress is the totality of elements in which a product or service is packaged or presented. These elements combine to create the whole visual image presented to customers and can be protected by exclusive legal rights in the same way as a trademark or identifying symbol of origin. Because trade dress includes all factors making up the total image under which a product or service is presented to customers, it potentially covers almost all aspects of appearance. Things that have been held protectable under the category of trade dress include: (1) the shape and appearance of a product; (2) the shape and appearance of a container; (3) the cover of a book or magazine; (4) the layout and appearance of a business establishment such as a restaurant; (5) the theme and look of a line of greeting cards; and (6) the recognizable shape of an automobile.

What is a trade secret?

A trade secret is any valuable business information that is that is not generally known and is subject to reasonable efforts to preserve confidentiality. A trade secret will be protected from misappropriation (through state law) by those who either obtain access through improper means or who breach a promise to keep the information confidential.  Trade secret misappropriation is really a type of unfair competition. Remedies for infringement of a trade secret include damages, profits, reasonable royalties, and an injunction. Some statutes also provide for enhanced damages and attorneys fees in certain circumstances.

Overlap between Patent & Trade Secret Protection

It is important to understand how patent and trade secret law overlap.  It is worth noting that many people erroneously believe that when an inventor applies for a patent all trade secrets are lost. This is simply not true. Anyone who tells you this is either over simplifying the process or does not understand patent law. US patent law requires an individual to disclose the best way to make and use the invention, which is referred to as the "best mode" requirement. Because the invention is defined by the claims, you must disclose the best way to make the invention you claimed, not necessarily the best way to make what you invented. The critical distinction comes into play as a result of the difference in what may be claimed and what was invented. Additionally, the requirement that the best mode be disclosed is satisfied by disclosing the preferred embodiment at the time the application is filed. In other words, if you learn more about your invention after you file the patent application you do not need to disclose that information. This is significant because much of the invention can frequently be retained as a trade secret, if there is appropriate claiming and preservation of trade secret information. Because a trade secret exists only so long as it remains a secret, the inventor must be careful to take particular precautions to preserve the integrity and secrecy of all information related to the invention and the invention process.

Duration of Intellectual Property Protection

As a general rule, Intellectual property protection does not last forever, although trademarks and trade secrets do at least dangle the possibility of protection in perpetuity. Below is a general discussion of the duration of the various forms of intellectual property.

Patents

The duration of patent protection in the United States is dependent upon the type of patent that is acquired, whether additional fees are paid to keep the patent current, and whether any time is added to the exclusive period due to governmental delay.

Utility Patents - A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office. Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees.

Plant Patents - Grant of a patent for a plant precludes others from asexually reproducing or selling or using the patented plant. A plant patent expires 20 years from the filing date of the patent application. As with utility applications, when the plant patent expires, the subject matter of the patent becomes public domain.

Design Patents - The patent laws provide for the granting of design patents to any person who has invented any new and nonobvious ornamental design for an article of manufacture. The design patent protects only the appearance of an article, but not its structural or functional features. A design patent has a term of 14 years from grant, and no fees are necessary to maintain a design patent in force.  For more information about design patents see this month's Factoid section.

About Patent Maintenance Fees - All utility patents that issue from applications filed on and after December 12, 1980 are subject to the payment of maintenance fees which must be paid to maintain the exclusivity of the patent. These fees are due at 3 1/2, 7 1/2 and 11 1/2 years from the date the patent is granted and can be paid without a surcharge during the six-month period preceding each due date. Failure to pay the current maintenance fee on time may result in expiration of the patent. A six-month grace period is provided when the maintenance fee may be paid with a surcharge. The grace period is the six-month period immediately following the due date. The USPTO does not mail notices to patent owners that maintenance fees are due. If, however, the maintenance fee is not paid on time, efforts are made to remind the responsible party that the maintenance fee may be paid during the grace period with a surcharge.

About Patent Term Extension - The terms of certain patents may be subject to extension or adjustment under 35 U.S.C. 154(b). Such extension or adjustment results from certain specified types of delays which may occur while an application is pending before the Office. Utility and plant patents which issue from original applications filed on or after May 29, 2000 may be eligible for patent term adjustment (PTA). There are three main bases for term adjustment. First, is the failure of the Office to take certain actions within specific timeframes required by applicable statutes. Second is the failure of the Office to issue a patent within three years of the actual filing date of the application. The third basis for patent term adjustment includes delays due to interference proceedings under 35 U.S.C. 135(a), secrecy orders under 35 U.S.C. 181, or successful appellate review.

Copyrights

The duration of copyright protection is rather complex, thanks to the Congress constantly changing the term over the years.  For all intents and purposes the most relevant information regarding copyright duration relates to those works that were originally created on or after January 1, 1978.  A work that is created on or after January 1, 1978, is automatically protected from the moment of its creation and is ordinarily given a term enduring for the author's life plus an additional 70 years after the author's death. In the case of "a joint work prepared by two or more authors who did not work for hire," the term lasts for 70 years after the last surviving author's death. For works made for hire, and for anonymous and pseudonymous works, the duration of copyright will be 95 years from publication or 120 years from creation, whichever is shorter.

Trade Secrets

Trade secret protection is very fragile and of uncertain duration. As long as trade secret information is not generally known the trade secret protection can be enjoyed. Therefore, trade secrets can potentially last forever, but they rarely last for significant periods of time.  Exceptions to this rule are not unheard of.  In fact, the Coca Cola Company has managed to successful keep its trade secret on the Coke formula for well over 100 years.

Trademarks

Rights in a federally registered trademark can last indefinitely if the owner continues to use the mark on or in connection with the goods and/or services in the registration and files all necessary documentation in the USPTO at the appropriate times, as required to keep the trademark current. In general, the owner of a registration must periodically file: (1) Affidavits of Continued Use or Excusable Nonuse under 15 U.S.C. §1058; and (2) Applications for Renewal under 15 U.S.C. §1059.

It is not, however, necessary to have a federally registered trademark in order to have federally recognized rights. No registered trademark is necessary for protection under 15 U.S.C. § 1125(a), which focuses on preventing consumer confusion. This type of protection can last indefinitely even without a registered mark. Nevertheless, having a federally registered trademark confers significant additional protection, most notably superior national rights rather than merely regional or local rights.


Trade Dress

Rights to trade dress may be obtained through federal registration similar to that of registering a federal trademark. That being the case, this type of protection can last indefinitely. Likewise, 15 U.S.C. § 1125(a), which focuses on preventing consumer confusion, affords trade dress protection even in the absence of federal registration.  This type of protection can last indefinitely as well. In fact, with respect to trade dress protection it is probably more common to simply rely upon unregistered protection under 15 U.S.C. § 1125(a).

Rights to trade dress may be obtained through federal registration similar to that of registering a federal trademark. That being the case, this type of protection can last indefinitely. Likewise, 15 U.S.C. § 1125(a), which focuses on preventing consumer confusion, affords trade dress protection even in the absence of federal registration.  This type of protection can last indefinitely as well. In fact, with respect to trade dress protection it is probably more common to simply rely upon unregistered protection under 15 U.S.C. § 1125(a).

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