Chapter 12: The importance of Intellectual Property

Product of human intellect that is intangible but has value in the market.

Intellectual Property

• Patents

• Trademarks

• Copyrights

• Trade secrets

Key forms of intellectual property

A certification granted by the government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent

Patent

It takes an average if 25.3 months from the date of the first filing to receive a U.S patent

Time it takes to receive a U.S patent

1. Utility Requirement: Your invention must be useful

2. Eligibility Requirement

3. Novelty Requirement: Is your invention new?

4. Nonobviousness Requirement: Is your invention obvious

Three basic requirements for a patent

A type of patent that covers new or useful process, machine, manufacturer, or composition of material or any new and useful improvement thereof. Duration of 20 years from the day of original application

Utility Patent

A type of patent that covers invention of new, original, and ornamental designs for manufactured products. Takes a duration of 14 years from the date of original application

Design Patent

A patent that covers any new varieties of plants that can be reproduced asexually. Takes a duration of 20 years from the date of the original application

Plant Patent

A patent that protects an invention that is or facilitates a method of doing business.

Business model patent

Occurs when one party engages in the unauthorized use of another party’s patent. Patent infringement cases are costly to litigate. On average, it costs between $2.3 million and $4 million to litigate.

Patent Infringement

Any word, name, or symbol, or device used to identify the source or origin of products or services and to distinguish those product or services from others. They also provide consumers with useful information

Trademark

Firms use these to identify their services or intangible activities rather than their physical products. Duration: every 10 years when the mark remains in use. (e.g 1-800-Flowers, www.Amzaon.com, Etsy, Patreon)

Service Mark

Trademarks or service marks that members of a cooperative, association, or other collective group use. Duration: every 10 years if the mark remains in use. (e.g. Information Technology, Industry council, International franchise association, Rotary International)

Collective Mark

Marks words, names, symbols, or devices as a person other than its owner uses to certify a specific quality about a good or service. Duration: every 10 years, if the mark remains in use.

Certification Mark

Step 1: Select an appropriate mark

Step 2: Perform a trademark search

Step 3: Create rights in the trademark

Process of Obtaining a Trademark

The unauthorized use of a trademark or service mark in a manner that is likely to cause confusion

Trademark Infringement

Is a form of intellectual property protection that grants the owner of a work or authorship the legal right to determine how the work is used and to obtain the economic benefits from the work. The work must be tangible form such as a book, music score, computer software program, an operating manual.etc.

Copyright

• Literary Works

• Musical Compositions

• Computer software

• Dramatic works

• Pantomimes and choreographic works

• Pictorial, graphic, and sculptural works

What does copyright protect?

• Provide a copyright notice or register work with the U.S copyright office (although it is not necessary)

• Attach a copyright notice, or “copyright bug” © to something

How to obtain a Copyright

Occurs when one work derives from another, in an exact copy, or shows substantial similarities to the original work. To prove infringement, a copyright owner is required to show that the alleged infringer had prior access to the copyrighted work, and the work is substantially similar to the owners.

Copyright infringement

Allows one to use copyrighted material for the purposes such as criticism, comment, news reporting, teaching, or scholarship

Fair use

Any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace. Also includes marketing plans, product formulas financial forecasts, employee rosters, logs of sales calls, and similar types of proprietary information.

Trade Secrets

Companies protect trade secrets through physical measures and written documents. Information that is known to the public or that even competitors can discover through legal means doesn’t qualify for trade secret protection

What qualifies for a trade secret protection

Physical measures to protect trade secrets:

• Restricting access

• Password protecting confidential computer files

• Maintaining logbooks for access to sensitive material

• Labeling documents

• Maintaining logbooks for visitors

• Maintaining adequate overall security measures

Written agreements

• Ask employees to sign nondisclosure and noncompete agreements

Trade Secret Protection Methods

Determines the intellectual property a firm owns

Intellectual Property Audit

Intellectual property audits can be conducted to:

1) periodically determine whether its intellectual property is being properly protected

2) To remain prepared to justify its valuation in the event of a merger or aquisition

Two reasons for conducting an intellectual property audit