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TopicsWhat avenues are available for those who need to protect innovative ideas? Would you like to understand the driving principles of Intellectual Property? This article is to address those questions and more. Whether you prefer to keep secrets or head to the patent and trademark office, multiple strategies exist to keep intellectual property safe, and we can shed light on the best ones.
Understanding Intellectual Property Rights: United States Patent, Trademark, and Trade Secrets
What is intellectual property?
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce. IP is a broad categorical description for the various legal entitlements which attach to certain types of information, ideas, or other intangibles in their expressed form. The holder of this legal entitlement is generally granted exclusive rights to use, produce, and sell the creative work or invention. These rights are enforceable by law, providing the creator or owner control and potential economic benefit from what they have created. Disclosure agreements and confidentially agreements help to manage intellectual property between parties.
Intellectual Property Law Basics: A Primer for Entrepreneurs and Innovators
Intellectual property takes many forms, but the most important ones are outlined here:
Patents: Patents protect recent inventions, cover how things work, what things do, how they do it, what they are made of, and how they are made. Patents provide the patent holder with exclusive rights to the invention for a specified amount of time.
When the word ‘Protect’ is used around a patent, it is referring to the right to exclude others from making or selling their invention for a specified amount of time without the consent of the inventor. Patents are an incentive for innovative individuals and companies to create improved technologies and benefit from doing so.
Trademarks: Trademarks do not protect inventions, but the identity of a brand, particularly logos, names, and slogans.
Trade Secrets: Trade secrets and trade secret laws exist to protect business information that is not generally known and provides a competitive edge. Trade secrets include and are usually associated with process related items, such as formulas, manufacturing processes, and recipes. The Economic Espionage Act of 1996 plays an important role in protecting intellectual property by criminalizing the theft or misappropriation of trade secrets, offering legal recourse for businesses facing industrial espionage.
Patents: Patents protect recent inventions, cover how things work, what things do, how they do it, what they are made of, and how they are made. Patents provide the patent holder with exclusive rights to the invention for a specified amount of time.
When the word ‘Protect’ is used around a patent, it is referring to the right to exclude others from making or selling their invention for a specified amount of time without the consent of the inventor. Patents are an incentive for innovative individuals and companies to create improved technologies and benefit from doing so.
Trademarks: Trademarks do not protect inventions, but the identity of a brand, particularly logos, names, and slogans.
Trade Secrets: Trade secrets and trade secret laws exist to protect business information that is not generally known and provides a competitive edge. Trade secrets include and are usually associated with process related items, such as formulas, manufacturing processes, and recipes. The Economic Espionage Act of 1996 plays an important role in protecting intellectual property by criminalizing the theft or misappropriation of trade secrets, offering legal recourse for businesses facing industrial espionage.
The formula of Coca-Cola is an example of a trade secret.
Details on Patents
Several types of patents exist, each with their own sets of pros and cons. These patents are:
Utility patents
These are the most common type of patent. Utility patents are granted for the invention or discovery of new and useful processes, machines, manufactures, or compositions of matter, or any new and useful improvements thereof. This category covers most inventions, including new technologies, mechanical devices, electronics, chemical compositions, and manufacturing processes. The term for a new utility patent is generally 20 years from the date of application. However, the patent term can be adjusted or extended under certain circumstances, such as delays as a result of patent office procedures or for pharmaceutical patents that require regulatory approval.
Design Patents
Design patents protect the unique visual qualities of a manufactured item. A design patent safeguards the ornamental design, look, or shape of an invention, but not its functional aspects. This type of patent is typically used for industrial or product design where the appearance of the product is important. The term for a design patent is 15 years from the date of grant for patents issued from applications filed on or after May 13, 2015 (and 14 years for patents issued from applications filed before this date).
Plant Patents
Plant patents are granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant. This includes cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber-propagated plant or a plant found in an uncultivated state. The term of a plant patent is 20 years from the date of filing the application.
Patent Eligibility
What makes intellectual property eligible to be patented? In a United States Jurisdiction, there are a few requirements that can be found in 35 U.S.C. § 101-112:
Novelty
The invention must be new, meaning it must not have been previously known to the public. This implies that the invention has not been previously disclosed, published, used, or sold before the patent application is filed. The novelty criterion ensures that patents are only granted for genuinely unique innovations.
Non-Obviousness (Inventive Step)
The invention must be non-obvious to someone with knowledge and experience in the subject area. This means that the invention should not be an obvious development or improvement to someone skilled in the relevant field. This requirement is known as the "inventive step" in some jurisdictions and is intended to exclude trivial or incremental improvements from being patented.
Utility (Industrial Applicability)
The invention must be useful or have some practical application. In other words, it must work and achieve some intended purpose. This criterion is referred to as "industrial applicability" in some regions. It prevents the patenting of inventions that are speculative or theoretical and do not have a demonstrable practical application.
Eligibility (Subject Matter)
The invention must fall within the scope of patentable subject matter as defined by law. Generally, this includes processes, machines, manufactures, and compositions of matter. However, laws vary by country; for example, abstract ideas, natural phenomena, and laws of nature are typically not patentable.
Sufficient Disclosure
The patent application must disclose the invention in enough detail that a person skilled in the relevant field could replicate or use the invention. This requirement ensures that the public can benefit from the knowledge of the invention once the patent expires, contributing to the advancement of technology and industry.
Clear and Specific Claims
The application must include claims that clearly and specifically define the boundaries of the invention’s protection. These claims are crucial as they determine the scope of the patent’s legal protection.
Moral and Legal Standards
Some jurisdictions also require that the invention must not be contrary to public order or morality. For example, inventions related to illegal activities or harmful substances may be denied patent protection.
Patentable Forms
Different countries have varying rules about what forms of invention can be patented. For instance, software patents are subject to different rules and interpretations in different jurisdictions.
Patent laws and interpretations can vary from country to country, so the specific requirements for patentability may differ depending on the jurisdiction. Consulting a patent attorney or a patent office can provide guidance tailored to the specific legal context of the invention.
Key Steps in the Patent Application Process
To obtain a patent, one should accomplish the following steps:
1. Invention disclosure
The invention should be documented in detail.
2. Patent search
A thorough search through existing patents should be conducted to ensure the invention is unique. Examining existing patents can be a time-consuming process. You can search for registered trademarks by visiting the official Trademark Office USPTO website or google patents.
https://www.uspto.gov
https://patents.google.com/
https://www.uspto.gov
https://patents.google.com/
3. Application filing
Submitting a detailed description and documentation of the invention to the patent office.
4. Examination Process
The patent office reviews the application for compliance with legal requirements.
Key Components of a Trade Secret
Trade secrets provide different risks and benefits as compared to patents. A trade secret should be:
1. Unable to be reverse engineered
2. Outside public knowledge
3. Be of economic benefit to the holder of the trade secret
4. Able to be kept a secret
A patent is a publicly available disclosure, whereas a trade secret is not shared with the public at all, but is kept a secret. If a trade secret is used, it is highly important to document all detail about the trade secret, and of course, keep it secret. However, one may ask, why would a person document something that shouldn’t be shared?
1. Unable to be reverse engineered
2. Outside public knowledge
3. Be of economic benefit to the holder of the trade secret
4. Able to be kept a secret
A patent is a publicly available disclosure, whereas a trade secret is not shared with the public at all, but is kept a secret. If a trade secret is used, it is highly important to document all detail about the trade secret, and of course, keep it secret. However, one may ask, why would a person document something that shouldn’t be shared?
Prior use rights
Consider a business that has developed a way to make the strongest carbon fiber that has ever been produced, and the strength comes form a new way of producing the fibers that can’t be reverse engineered. If another company has performed research and development and has discovered the same secret, and patented the process. You would lose the right to your own trade secret, and the other company could even take legal action against you for using their patented technology, right?
Fortunately, if the correct documentation has occurred, the outlook is a lot less grim.
Prior use rights are a legal defense against patent infringement claims. If a company has been using a process or method as a trade secret before another party files for a patent on the same process, the company can claim prior use rights to continue using that process despite the patent. These rights will vary between jurisdictions; for example, in the United States, the Leahy-Smith America Invents Act (AIA) of 2011 made significant changes to prior use rights.
Before the AIA, U.S. patent law provided limited prior use rights, mainly in the context of business methods. The AIA expanded these rights, allowing the defense to be used for any type of patent, provided that the user had commercially used the subject matter at least one year before the patent application's filing date or the inventor's public disclosure date.
However, to assert prior use rights, a user typically must prove that they were using the patented invention commercially and in good faith before the patent applicant filed for the patent. This defense is personal and typically cannot be transferred or sold, except with the sale of the business line that relies on the prior use. So if you have a trade secret, ensure you have robust documentation on the secret as it may be challenged in court one day.
Fortunately, if the correct documentation has occurred, the outlook is a lot less grim.
Prior use rights are a legal defense against patent infringement claims. If a company has been using a process or method as a trade secret before another party files for a patent on the same process, the company can claim prior use rights to continue using that process despite the patent. These rights will vary between jurisdictions; for example, in the United States, the Leahy-Smith America Invents Act (AIA) of 2011 made significant changes to prior use rights.
Before the AIA, U.S. patent law provided limited prior use rights, mainly in the context of business methods. The AIA expanded these rights, allowing the defense to be used for any type of patent, provided that the user had commercially used the subject matter at least one year before the patent application's filing date or the inventor's public disclosure date.
However, to assert prior use rights, a user typically must prove that they were using the patented invention commercially and in good faith before the patent applicant filed for the patent. This defense is personal and typically cannot be transferred or sold, except with the sale of the business line that relies on the prior use. So if you have a trade secret, ensure you have robust documentation on the secret as it may be challenged in court one day.
Patents vs Trade Secrets
Patent | Trade Secret | |
---|---|---|
Rights | Patents provide exclusive rights ensuring only the patent holder can use the intellectual property. | Others may also use or even patent your trade secret if they discover it. |
Expiration | Patents last for a specified amount of time and then expire. A patent requires public disclosure, so once it is expired the public can access the patent and reproduce it. An expired patent is considered public domain. | Trade secrets will last forever and have no expiration as long as nobody discovers the secret. |
Legal Enforcement | Patents can be legally enforced if infringed. | Trade secrets do not grant anyone the right to legal action if their trade secret is used by another party. |
Cost | Patents can be expensive to document, search, disclose and register. | Trade secrets do not have costs, but documenting them internally is important. |
Security measures | Patents are publicly available and legally enforceable; there is not a need to keep patents a secret. | Efforts toward trade secret protection are critical and require many careful measures. |
Geographical limitations | Patents may need to be registered in several jurisdictions for proper protections. Once registered in multiple jurisdictions, they can offer global protection. | Trade secrets have no geographical limitations to own; various jurisdictions may have varying prior use rights if a trade secret is discovered. |
Marketing | Anyone can understand the advantages of a patented product as a result of its public disclosure. Patents offer a competitive advantage with the opportunity to excite investors and market products. | Trade secrets are meant to be the opposite of public, so there may be less marketability for certain products. |
Trademarks
Trademarks are separate from inventions, processes, or other product related intellectual property. Instead, trademarks are to protect brand identity. A thorough understanding of the trademark process is recommended to protect your brand. Here is an overview of trademark registration:
Trademark Search
Ensure your mark is unique.
Application Filing
Submit the necessary forms and fees.
Examination by the Office
The trademark office will review your application
Public Opposition Period
Allow time for any objections.
Registration and Renewal
Once registered, maintain and renew your trademark as required.
Interesting patent cases in real life
Stealing the formula of Coca-Cola
In 2006, Joya Williams, who was then a secretary at Coca-Cola, conspired with two other individuals, Ibrahim Dimson and Edmund Duhaney, to sell Coca-Cola's trade secrets to its rival, PepsiCo. They attempted to sell confidential documents and a sample of a new beverage to Pepsi for $1.5 million.
Upon receiving a letter offering Coca-Cola's confidential information, PepsiCo did not entertain the offer. Instead, they alerted Coca-Cola to the breach and subsequently the FBI was involved. Pepsi's decision to inform Coca-Cola about the plot was widely praised as an exemplary act of corporate ethics and integrity.
The FBI set up a sting operation where an undercover FBI agent posed as a Pepsi executive. The agent agreed to purchase the trade secrets and arranged a meeting to exchange the documents for money.
Williams, Dimson, and Duhaney were arrested in connection with the theft and attempted sale of the trade secrets. Joya Williams was convicted of conspiracy to steal trade secrets and was sentenced to eight years in federal prison. The other conspirators also received prison sentences.
Upon receiving a letter offering Coca-Cola's confidential information, PepsiCo did not entertain the offer. Instead, they alerted Coca-Cola to the breach and subsequently the FBI was involved. Pepsi's decision to inform Coca-Cola about the plot was widely praised as an exemplary act of corporate ethics and integrity.
The FBI set up a sting operation where an undercover FBI agent posed as a Pepsi executive. The agent agreed to purchase the trade secrets and arranged a meeting to exchange the documents for money.
Williams, Dimson, and Duhaney were arrested in connection with the theft and attempted sale of the trade secrets. Joya Williams was convicted of conspiracy to steal trade secrets and was sentenced to eight years in federal prison. The other conspirators also received prison sentences.
Gore vs. Bard Patent Dispute
In a legal battle spanning over three decades, often referred to as the largest case in business history, W.L. Gore & Associates, known for its Gore-Tex fabric, and C.R. Bard, a medical device company, engaged in a complex patent infringement case. The dispute revolved around a patent for a vascular graft made from expanded polytetrafluoroethylene (ePTFE), a material that is only made by Gore and is a trade secret.
The Patent Conflict: The conflict began when Dr. David Goldfarb, who had developed an ePTFE vascular graft, filed for a patent in 1974. Around the same time, W.L. Gore & Associates also filed a patent for a similar vascular graft technology. This led to a protracted legal dispute over who had the rights to the patent.
The core of the legal contention hinged on determining the rightful patent owner of the ePTFE vascular graft. The graft could not be produced without the trade secrets of Gore technology, but Dr. Goldfarb claimed to know what was needed to make the graft viable.
The protracted legal battle between the two entities exemplified key principles of IP ownership, particularly in patent law. The primary issues revolved around the concepts of 'novelty' and 'prior art' in patent legislation, which dictate that patent rights are granted to those who first invent a unique technology, not necessarily the first to file for a patent. Additionally, the case delved into the intricacies of 'inventorship' and 'patentability,' exploring the nuances of what constitutes a patentable invention and who is legally recognized as the inventor.
Ultimately, the U.S. Court of Appeals for the Federal Circuit's decision in favor of C.R. Bard, awarding damages at over $1 Billion.
The Patent Conflict: The conflict began when Dr. David Goldfarb, who had developed an ePTFE vascular graft, filed for a patent in 1974. Around the same time, W.L. Gore & Associates also filed a patent for a similar vascular graft technology. This led to a protracted legal dispute over who had the rights to the patent.
The core of the legal contention hinged on determining the rightful patent owner of the ePTFE vascular graft. The graft could not be produced without the trade secrets of Gore technology, but Dr. Goldfarb claimed to know what was needed to make the graft viable.
The protracted legal battle between the two entities exemplified key principles of IP ownership, particularly in patent law. The primary issues revolved around the concepts of 'novelty' and 'prior art' in patent legislation, which dictate that patent rights are granted to those who first invent a unique technology, not necessarily the first to file for a patent. Additionally, the case delved into the intricacies of 'inventorship' and 'patentability,' exploring the nuances of what constitutes a patentable invention and who is legally recognized as the inventor.
Ultimately, the U.S. Court of Appeals for the Federal Circuit's decision in favor of C.R. Bard, awarding damages at over $1 Billion.
Polaroid vs. Kodak
Polaroid, led by its visionary founder Edwin Land, revolutionized photography with the introduction of instant film cameras in the late 1940s. These cameras allowed users to take a photo and have a developed picture in minutes, an innovation that captivated consumers. Polaroid's technology was protected by a wide array of patents, safeguarding its unique process of instant photography.
In the 1970s, Kodak, a behemoth in the traditional film industry, ventured into the realm of instant photography. This move set the stage for a monumental clash. Kodak's foray into instant cameras was seen as a direct challenge to Polaroid's domain, leading to one of the most significant patent infringement lawsuits of the 20th century.
Polaroid took swift legal action against Kodak, alleging infringement on its patents for instant photography. The lawsuit, filed in 1976, claimed that Kodak's instant cameras and film infringed on multiple Polaroid patents. What ensued was a grueling legal battle that lasted nearly a decade, delving into the intricate details of photographic technology and patent law.
In 1985, the verdict was finally delivered. The court found Kodak guilty of infringing on Polaroid's patents, a landmark decision in the world of intellectual property. Kodak was ordered to halt the production and sale of its instant cameras and film, and to pay substantial damages to Polaroid. The financial impact on Kodak was significant, with hundreds of millions of dollars in compensation and legal fees.
But the repercussions extended beyond the courtroom. Kodak had to withdraw from the instant camera market, and thousands of Kodak employees working in the instant photography division faced uncertainty. For Polaroid, the victory was bittersweet; while it affirmed the company's intellectual property rights, the legal battle was costly, and the landscape of photography was rapidly evolving with the advent of digital technology.
In the 1970s, Kodak, a behemoth in the traditional film industry, ventured into the realm of instant photography. This move set the stage for a monumental clash. Kodak's foray into instant cameras was seen as a direct challenge to Polaroid's domain, leading to one of the most significant patent infringement lawsuits of the 20th century.
Polaroid took swift legal action against Kodak, alleging infringement on its patents for instant photography. The lawsuit, filed in 1976, claimed that Kodak's instant cameras and film infringed on multiple Polaroid patents. What ensued was a grueling legal battle that lasted nearly a decade, delving into the intricate details of photographic technology and patent law.
In 1985, the verdict was finally delivered. The court found Kodak guilty of infringing on Polaroid's patents, a landmark decision in the world of intellectual property. Kodak was ordered to halt the production and sale of its instant cameras and film, and to pay substantial damages to Polaroid. The financial impact on Kodak was significant, with hundreds of millions of dollars in compensation and legal fees.
But the repercussions extended beyond the courtroom. Kodak had to withdraw from the instant camera market, and thousands of Kodak employees working in the instant photography division faced uncertainty. For Polaroid, the victory was bittersweet; while it affirmed the company's intellectual property rights, the legal battle was costly, and the landscape of photography was rapidly evolving with the advent of digital technology.
In Conclusion
When you have an idea, it can be important to have a strategy to protect it. In this article, we discussed IP protections such as various patents and trade secrets.
The information provided in this blog post, including text, graphics, images, and other material, is for informational purposes only and not intended as legal advice. The contents of this post do not constitute legal counsel and should not be relied upon as such. Intellectual property laws vary significantly in different jurisdictions and are subject to interpretation by different courts. Therefore, the information presented here is not a substitute for professional legal advice from a lawyer or law firm.
We strongly advise readers to seek the advice of a qualified attorney for guidance regarding any specific legal issue related to intellectual property rights, including patents, trademarks, and trade secrets. The use of and access to the information in this blog do not create an attorney-client relationship between the reader and the blog authors or publisher. Any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on our content by any visitor to the site, or by anyone who may be informed of any of its contents.
The information provided in this blog post, including text, graphics, images, and other material, is for informational purposes only and not intended as legal advice. The contents of this post do not constitute legal counsel and should not be relied upon as such. Intellectual property laws vary significantly in different jurisdictions and are subject to interpretation by different courts. Therefore, the information presented here is not a substitute for professional legal advice from a lawyer or law firm.
We strongly advise readers to seek the advice of a qualified attorney for guidance regarding any specific legal issue related to intellectual property rights, including patents, trademarks, and trade secrets. The use of and access to the information in this blog do not create an attorney-client relationship between the reader and the blog authors or publisher. Any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on our content by any visitor to the site, or by anyone who may be informed of any of its contents.