Written by Patrick Richards, Partner at K&L Gates LLP
Note: This article is not legal advice for your specific circumstance. If you are considering IP protection, you should contact your own attorney.
Students new to The Garage often express concern that they need to immediately patent their project idea or invention before anyone else copies the idea. While there are strict timelines for when patents can be filed, and there are times that pursuing patent protection is a useful first step for a new business, it is certainly not always the most important and urgent intellectual property priority to address. However, simply asking patent questions can be useful in opening a conversation about intellectual property (IP) more generally and it is never too early in a project to start asking questions about how and when to protect your IP.
While this article presents high-level information about various IP protections, there are many detailed resources available at the U.S. Patent and Trademark Office and the U.S. Copyright Office. For example, this page of entrepreneur and inventor resources at the USPTO may be helpful. You can also learn more at the Student Business Formation website, and The Garage holds Legal & IP Office Hours on a regular basis, which you can book here.
There are four types of intellectual property:
A well-crafted IP strategy focuses on building value in your brand by using protection for your unique selling propositions to differentiate your products and services in the marketplace. Generally speaking, businesses do this by using the competitive advantage provided by their patents, copyrights, and trade secrets to build value in their trademarks. We recognize Disney as a valuable entertainment company whose trademark is valuable because the value of its movies’ copyrights. The trademarks in pharmaceutical brands, like Tylenol, were built on the value of their patented drugs. Coca-Cola’s trademarks are strengthened by the trade secret that protects the Coke recipe.
The following is a short description of initial strategies for managing each type of IP. The brief introductions to each IP regime are meant to help you think about how IP rights might affect your business and help you to open a conversation about IP rights with mentors and lawyers. You can use these introductions to help you start thinking about how to best use your patents, copyrights, and trade secrets to build more valuable trademarks.
Trademarks are the names, logos, and taglines that identify your business to your customers. It is important to take a thoughtful approach to your trademarks early, as missteps can be costly and require you to rebrand your business just as you begin to gain traction in the market. A worst-case scenario is that you spend a lot of time and money building a company brand only to find that you have to change your name because someone else already owns the trademark. For this reason, it is important to address potential trademarks at an early stage.
There are two main considerations with trademarks: (1) is your mark confusingly similar to rights already owned by a third-party: and (2) is your mark appropriately distinctive such that the USPTO will grant you enforceable rights. These are questions best addressed by a trademark attorney.
However, at the earliest stages, particularly as you start narrowing down the name of the business or product, it can be helpful to use the USPTO trademark search tools to help focus your initial name selection. These tips for using the USPTO search tools can help you perform more useful searches, particularly to find names that clearly are not available. It is also important to use Google to see if you can find any conflicting uses of the trademark by other companies. Trademark rights do not need to be registered at the USPTO in order to be enforceable, so there is definitely value in looking for unregistered uses.
Once you start narrowing down the list of potential trademarks to a few favorites, it is best to meet with a trademark attorney to help determine the relative strengths and risks of each so you can make an informed decision before putting real investment into building your brand.
Trademarks can be registered at the federal or state level, but trademarks are not required to be registered to be enforceable. As soon as a brand begins selling goods or services using a trademark, the company develops common law rights in that mark. Unregistered marks can be designated using a superscript TM, such as MyBrandTM. Once a mark is federally registered, it can use the circle R, such as MyBrand®. Although you start developing rights in unregistered marks simply through their use, registered marks have many advantages over unregistered marks and are definitely worth exploring with proper guidance.
The cost for registering a trademark will vary based on the legal service provider you use and the complexity of the mark itself. However, the typical startup should not need to budget more than $2,000-$3,000 for comprehensive trademark representation in its first year.
When to speak with an attorney about trademark matters
Patents protect inventions from being copied by competitors. However, although we might think that the term “inventions” is fairly broad, the patent system has limitations on what qualifies for patent protection and what does not. While there are exceptions in both directions, inventions in the pharmaceutical and life sciences spaces, medical devices, other mechanical and electrical hardware devices are more likely to be patentable. Most projects directed to websites, apps, software, and service companies will have a much harder time finding patentable inventions and, as a result, very often should not concern themselves with the time and cost involved in applying for a patent.
Some examples of teams from The Garage who have applied for patents include Hubly Surgical (medical device / brain drill), PedalCell (hardware device / proprietary energy generator), and Amper (hardware device / machinery monitoring tool).
There are different types of patents and within each type of patent, there are varying levels of complexity. Depending on your invention and the type of patent type, the initial steps of applying for a patent will typically cost between $5,000-$15,000+, including fees for patent searches, application fees, illustrations, and attorney fees. To go from start to finish in the patent process can take several years and can be many tens of thousands of dollars, depending on how difficult of an examination the patent undergoes. Accordingly, even though it may be valuable to speak with a patent attorney to assess the potential value in pursuing patent protection for your invention, just because you can file a patent application doesn’t mean you should file a patent application. Before making the investment, there should be a very clear business purpose for pursuing a patent.
If you are considering a patent, we encourage you to read more on the Student Business Formation website, which will help guide you through the university licensing or waiver process, and to sign up for IP Office Hours to speak with an attorney.
When to speak to an attorney about patent matters
Copyrights are a form of protection provided to the authors of “original works of authorship fixed in tangible media.” Copyright protection is acquired simply by fixing your original work of authorship in some tangible form. What that means is, if you think of an original story and tell it to those around you, you do not have material covered by copyright protection. However, by simply writing your story down, or by making a recording of yourself telling the story, you have acquired copyright protection. Like trademarks, although some rights naturally result from the creation of the copyright material, federal registration can help to strengthen and perfect those rights.
Copyrights are typically thought of as covering literary works, performing and musical arts, visual arts, motion pictures, photographs, and other artistic works. But copyright protection also extends to computer programs, data sets, blogs, and websites. And, as with patents and trademarks, we aren’t merely interested in protecting what’s ours, it is important to make sure you aren’t infringing the rights of others.
It is uncommon for student projects at The Garage to need to actively register copyrights at an early stage of the business. However, it is more common that these student projects could benefit from better understanding whether their business plan requires the use (and licensing) of any third party copyrights. Does your business require the use of someone else’s software? Are you planning to use someone else’s compilation of data? Are you planning to use someone else’s videos or photographs? It is important to think through whether you have any potential copyright infringement issues to consider.
Another important copyright is consideration is whether you have the appropriate agreements in place such that the people creating content for your business (taking photos, writing content, recording music, etc.) have assigned their rights to the business. If not, you might run into a situation in which someone you thought was creating content for your business actually owns that content.
Although it is uncommon for an early stage startup to need to budget for actually filing copyright protection, talking through copyright issues with an IP lawyer may help you identify licenses, service agreements, and other business concerns that need to be addressed.
When to talk to an attorney about copyrights
Trade secrets are confidential information that provide your business a competitive advantage. Unlike trademarks, patents, and copyrights, there is no registration procedure for trade secrets; you protect trade secrets simply by keeping them secret.
When assessing what information your business may have that can be protected as a trade secret, you consider how easy the information will be to reverse engineer by your competitors. Some products and services, by their very nature, reveal exactly what they are to anyone that uses them. Other products and services are less revealing. For example, although anyone that uses Google to search for content online understands that there is a search algorithm that ranks the online content in response to a search inquiry, the actual algorithm cannot easily be reversed engineered. Keeping the algorithm secret protects its value from competitors.
Once you have identified whether your business has any proprietary information that should be protected as a trade secret, you will want to take steps to keep the information confidential by limiting access to it to the smallest number of people necessary and by having those with access to it signing non-disclosure and confidentiality agreements. While neither complex, nor costly, trade secrets can be very important and, for that reason, it is worth taking some time to talk through your potential trade secrets with an IP attorney.
When to talk to an attorney about trade secrets
We hope this information has been helpful as a high-level introduction to IP rights. If you have any questions or concerns about IP rights, please take advantage of the resources we make available to through our IP Office Hours.
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