Intellectual property is a term used for an area of the law dealing with creations of the mind and the corresponding property rights to these creations.  Copyrights, trademarks, patents and trade secrets are all types of intellectual property (“IP”).   I find that the majority of creative business owners are somewhat confused by these different types of IP and even those who think they have it down are often mixing up at least two of these areas with each other.  But for those of you who really do have a firm grasp on what each of these areas of IP encompasses, I apologize for this intro post, and we’ll get to some meatier IP subjects soon in additional posts.

What is a Trademark?

Basically, a trademark is your company’s brand. In more technical terms, a trademark is a word, name, symbol or device that is used in commerce with a product to indicate the source of the product and to distinguish it from the products of others.  While “trademark” is the most commonly used term, there is a distinction made for words, names, symbols or devices used in trade to indicate the source of a service, rather than a product, and these are called “service marks.”  A “trade name” is the term used to refer to a business’ name.  “Trade dress” refers to the appearance of a product or its packaging, when that appearance indicates the source of the product.

So how does this relate to your business?  Well, not only do you want and need to protect your company’s brand, but you also need to ensure that you are not infringing on the trademark rights of others.  Trademarks can be registered with the United States Patent and Trademark Office, but registration is not an absolute requirement for ownership.   Trademark rights are actually acquired by the trademark owner as soon as the mark is used in commerce to indicate the source of the product or service.  These pre-registration rights are referred to as “common law” rights.  However, registration with the USPTO is a requirement in order to initiate a trademark infringement action against an alleged infringer, and registration is also beneficial as notice to others of ownership of the mark, and also as evidence of the length of ownership of the mark.  Contrary to popular belief, not every word or name can be a valid trademark, even if they are not being used by another person or business. My next post will discuss trademarks in more detail, including the registration requirements.

What is a Copyright?

Copyright deals with the rights of an author or creator of an original work.  Copyright does not protect many of the things people think it does.  Copyright does not protect ideas, concepts, facts, names, titles, slogans, procedures or methods.  Copyright only protects “original works of authorship fixed in a tangible medium of expression.”  Examples of “tangible mediums of expression” include photos, video recordings, audio recordings, written records, paintings and computer programs.  Copyright protection starts as soon as the author or creator’s original work is fixed in one of the above tangible mediums of expression, and the author or creator then begins establishing common law rights.  But, like with trademark, the work must be registered in order to be able to pursue alleged copyright infringers. Copyrights are registered with the United States Copyright Office.

I’m sure most of you are aware that photographs and videos have copyright protection, and ownership is attributed to the photographer or videographer.  But copyright protection is also afforded to the text on your business website, or the language in your advertising and marketing material, whether or not you realized that when you wrote it.

There are certain exceptions to copyright, like fair use, and we will discuss this, as well as many other issues relating to copyrights, in future posts.

What is a Patent?

A patent is a set of rights given to an inventor for a certain period of time.   In order to receive this protection, the inventor must show that the invention is new, non-obvious and useful or industrially applicable.   In order to receive protection, the invention must be publicly disclosed, through registration with the United States Patent and Trademark Office.

Unlike with copyright and trademark, there are no common law rights for patents, and registration with the USPTO is a necessity from the outset to establish protection for the invention.

The term “patent” is frequently misused.  You cannot “patent an idea.”  I know you hear it all the time: “Wow, what a great idea! You should patent that!”  Well, your idea for an infallible wedding dress bustle mechanism is probably pretty awesome, but until you actually invent that mechanism and put it into practice, you do not have a patentable, legally protectable invention.   And you would either need to build a working prototype, or create a very elaborate technical drawing showing how the mechanism actually works, in order to complete a patent application. And just because you file for a patent, it does not mean that you actually have a patent.  The patent application review process by the Patent Office is long and extremely thorough, and you may come to find that someone else already invented your amazing bustle mechanism.

You also cannot generally patent business processes or recipes; however, these may be protected by trade secret (see below).

What is a Trade Secret?

A trade secret is basically your business’ confidential information.   In most states, this includes any formula, pattern, practice, physical device, design, idea, process or compilation of information that:
(1) provides the owner of the information with a competitive advantage in the marketplace, and
(2) is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft.

Some examples of potential trade secrets include customer lists, marketing strategies, recipes, manufacturing techniques, survey methods, or even a formula for a custom color of paint.

Trade secrets can be very important to your business, but are often overlooked or abused.  You cannot register your trade secrets the same way you can a trademark, copyright or patent.  Instead, your rights and protection relate specifically to your ability to keep your secrets secret. Your trade secret protection of your grandmother’s super-secret cake recipe that you use to bake cakes to sell in your bakery lasts as long as the recipe actually remains a secret. Once a trade secret is available to the public, it is no longer protected.  Trade secrets can be protected by maintaining organized files, with physical documents discussing alleged trade secrets marked “Confidential.”   Access to these files should be restricted only to those who need to access to the information as part of their duties, and information stored in computer files should be password-protected.  A trade secret owner should also use non-disclosure agreements with employees, vendors, contractors and other third parties before disclosing confidential information.

One potential issue with trade secrets is reverse engineering.  This basically means that another person or business works backward from a completed product to discover what elements went into making that product.  With recipes, this can mean that Bob’s Bakery starts out by buying one of Betty’s Bakery’s super-secret-recipe cakes, then tastes it, and starts experimenting with ingredients, combinations and ratios until they have replicated the recipe.  Once Bob’s Bakery has successfully discovered Betty’s Bakery’s trade secret recipe, there is no longer any trade secret protection for Betty’s Bakery, and Bob’s Bakery could theoretically publish the recipe in a magazine without violating Betty’s Bakery’s trade secret rights.  While reverse engineering is not illegal, commercial espionage is distinguishable, and is generally illegal under relevant state laws.   An example of commercial espionage would be where a prototype cake that is not yet available for purchase, or the actual recipe itself, is stolen or misappropriated from Betty’s Bakery by Bob’s Bakery.

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Sorry about the crazy length of this post – I hope you made it to the end without falling asleep! I know it’s a lot of information to take in, but understanding these subjects is so important to protecting your creative business and understanding your rights and responsibilities. I’ll be addressing these IP subjects in much more detail in future posts.

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