Chapter 12: Intro to Entrepreneurship: The Importance of Intellectual Property

Finance intellectual property

Contractual forms, PowerPoint slides describing the company's financial performance, written methodologies explaining how the company handles its finances, and employee pay records protected by copyright and trade secret

Exclusions from Trademark Protection

IMMORAL OR SCANDALOUS MATTER: A company cannot trademark immoral or scandalous matter, including profane words. DECEPTIVE MATTER: Marks that are deceptive cannot be registered. For example, a food company couldn't register the name "Fresh Florida Oranges" if the oranges weren't from Florida. DESCRIPTIVE MARKS: Marks that are merely descriptive of a product or service cannot be trademarked. For example, an entrepreneur couldn't design a new type of golf ball and try to obtain trademark protection on the words golf ball. The words describe a type of product rather than a brand of product, such as Titleist or Taylor Made, and are needed by all golf ball manufacturers to be competitive. This issue is a real concern for the manufacturers of very popular products. At one point, Xerox was in danger of losing trademark protection for the Xerox name because of the common use of the word Xeroxas a verb (e.g., "I am going to Xerox this."). SURNAMES: A trademark consisting primarily of a surname, such as Anderson or Smith, is typically not protectable. An exception is a surname combined with other wording that is intended to trademark a distinct product, such as William's Fresh Fish or Smith's Computer Emporium.

Marketing intellectual property

Names, slogans, logos, jingles, advertisements, brochures, pamphlets, ad copy under development, product videos, customer lists, prospect lists, and similar items protected by Trademark, copyright, and trade secret

Research and development intellectual property

New and useful inventions and business processes, improvements to existing inventions and processes, and laboratory notes documenting invention discovery dates and charting the progress on various projects protected by patent and trade secret

Management intellectual property

Recruiting brochures, employee handbooks, forms and checklists used by recruiters in qualifying and hiring candidates, written training materials, and company newsletters protected by copyright and trade secret

one year after first use deadline

The requirement that a patent application must be filed within one year of the milestones referred to previously

intent-to-use trademark application

This is an application based on the applicant's intention to use a trademark. Once this application is filed, the owner obtains the benefits of registration. The benefits are lost, however, if the owner does not use the mark in business within six months of registration. Further protection can be obtained by filing a formal application for a trademark. The application must include a drawing of the trademark and a filing fee, ranging from $275 to $375, depending on how the application is filed. (It's cheaper to file electronically.) After a trademark application is filed, an examining attorney at the USPTO determines if the trademark can be registered. It currently takes about 10 months to get a trademark registered through the USPTO.

Management information systems intellectual property

Website design, Internet domain names, company-specific training manuals for computer equipment and software, original computer code, e-mail lists, name registry protected by copyright, trade secret, and Internet domain

certification marks

are marks, words, names, symbols, or devices used by a person other than its owner to certify a particular quality about a product or service. The most familiar certification mark is the UL mark, which certifies that a product meets the safety standards established by Underwriters Laboratories. Other examples are the Good Housekeeping Seal of Approval, Stilton Cheese (a product from the Stilton region in England), and 100 percent Napa Valley (from grapes grown in the Napa Valley of northern California).

service marks

are similar to ordinary trademarks, but they are used to identify the services or intangible activities of a business rather than a business' physical product. These marks include The Princeton Review for test prep services, eBay for online auctions, and Verizon for smartphone service.

Utility patents

are the most common type of patent and cover what we generally think of as new invention duration- 20 years from the date of the original application

design patents

are the second most common type of patent and cover the invention of new, original, and ornamental designs for manufactured products duration- 14 years from the date of the original application

Collective marks

are trademarks or service marks used by the members of a cooperative, association, or other collective group, including marks indicating membership in a union or a similar organization. The marks belonging to the American Bar Association, The International Franchise Association, and the Collegiate Entrepreneurs' Organization are examples of collective marks.

secondary meaning/acquired distinctiveness

arises when, over time, consumers start to identify a trademark with a specific product. For example, the name "chap stick" for lip balm was originally considered to be descriptive, and thus not afforded trademark protection. As people started to think of "chap stick" as lip balm, it met the threshold of secondary meaning, and the name "ChapStick" was able to be trademarked. There are two ways that the USPTO can offer further protection for firms concerned about maintaining the exclusive rights to their trademarks.

copyright

is a form of intellectual property protection that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work.24 The work must be in a tangible form, such as a book, operating manual, magazine article, musical score, computer software program, or architectural drawing. If something is not in a tangible form, such as a speech that has never been recorded or saved on a computer disc, copyright law does not protect it.

copyright bug

is a form of intellectual property protection that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work.24 The work must be in a tangible form, such as a book, operating manual, magazine article, musical score, computer software program, or architectural drawing. If something is not in a tangible form, such as a speech that has never been recorded or saved on a computer disc, copyright law does not protect it.

patent

is a grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent

business method patent

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

intellectual property

is any product of human intellect that is intangible but has value in the marketplace

trademark

is any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others

copyright infringement

occurs when one work derives from another, is an exact copy, or shows substantial similarity 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 that the work is substantially similar to the owner's.

Lanham Act

passed in 1946, protects the following items: WORDS: All combinations of words are eligible for trademark registration, including single words, short phrases, and slogans. Birchbox, Rent the Runway, and the National Football League are examples of words and phrases that have been registered as trademarks. NUMBERS AND LETTERS: Numbers and letters are eligible for registration. Examples include 3M, Boeing 787, and AT&T. Alphanumeric marks are also registerable, such as 1-800-CONTACTS. DESIGNS OR LOGOS: A mark consisting solely of a design, such as the Golden Gate Bridge for Cisco Systems or the Nike swoosh logo, may be eligible for registration. The mark must be distinctive rather than generic. As a result, no one can claim exclusive rights to the image of the Golden Gate Bridge, but Cisco Systems can trademark its unique depiction of the bridge. Composite marks consist of a word or words in conjunction with a design. An example is the trademark for Zephyrhill's bottled water, which includes Zephyrhill's name below a picture of mountain scenery and water. SOUNDS: Distinctive sounds can be trademarked, although this form of trademark protection is rare. Recognizable examples of such sounds include MGM's lion's roar, the familiar four-tone sound that accompanies "Intel Inside" commercials, and the Yahoo yodel. FRAGRANCES: The fragrance of a product may be registerable as long as the product is not known for the fragrance or the fragrance does not enhance the use of the product. As a result, the fragrance of a perfume or room deodorizer is not eligible for trademark protection, whereas stationery treated with a special fragrance in most cases would be. SHAPES: The shape of a product, as long as it has no impact on the product's function, can be trademarked. The unique shape of the Apple iPod has received trademark protection.20 The Coca-Cola Company has trademarked its famous curved bottle. The shape of the bottle has no effect on the quality of the bottle or the beverage it holds; therefore, the shape is not functional. COLORS: A trademark may be obtained for a color as long as the color is not functional. For example, Nexium, a medicine pill that treats acid reflux disease, is purple and is marketed as "the purple pill." The color of the pill has no bearing on its functionality; therefore, it can be protected by trademark protection. TRADE DRESS: The manner in which a product is "dressed up" to appeal to customers is protectable. This category includes the overall packaging, design, and configuration of a product. As a result, the overall look of a business is protected as its trade dress. In a famous case in 1992, Two Pesos, Inc., v. Taco Cabana International Inc., the U.S. Supreme Court protected the overall design, colors, and configuration of a chain of Mexican restaurants from a competitor using a similar decor.21

Economic Espionage Act

passed in 1996, does criminalize the theft of trade secrets (known as misappropriation) by third parties.

plant patents

protect new varieties of plants that can be reproduced asexually. While only 1,180 of the 650,411 patent applications filed in 2016 were for plant patents,13 these patents provide essential protection for companies specializing in plant genetics and related areas duration- 20 years from the date of the original application

trade secret

s any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace. Trade secrets include marketing plans, product formulas, financial forecasts, employee rosters, logs of sales calls, and laboratory notebooks. The medium in which information is stored typically has no impact on whether it can be protected as a trade secret. As a result, written documents, computer files, audiotapes, videotapes, financial statements, and even an employee's memory of various items can be protected from unauthorized disclosure.

patent infringement

takes place when one party engages in the unauthorized use of another party's patent

The Uniform Trade Secrets Act

which a special commission drafted in 1979, attempted to set nationwide standards for trade secret legislation. Although the majority of states have adopted the act, most revised it, resulting in a wide disparity among states in regard to trade secret legislation and enforcement.

fair use

which is the limited use of copyrighted material for purposes such as criticism, comment, news reporting, teaching, or scholarship. This provision is what allows textbook authors to repeat quotes from magazine articles (as long as the original source is cited), movie critics to show clips from movies, and teachers to distribute portions of newspaper articles or blog entries. The reasoning behind the law is that the benefit to the public from such uses outweighs any harm to the copyright owner. Other situations in which copyrighted material may be used to a limited degree without fear of infringement include parody, reproduction by libraries, and making a single backup copy of a computer program or a digital music file for personal use.