Protecting Intellectual Property

trade secrets

- = A trade secret is 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 similar types of proprietary information. - The Federal Economic Espionage Act, passed in 1996, criminalizes the theft of trade secrets.

copyrights

- = 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. - A work does not have to have artistic merit to be eligible for copyright protection. - As a result, things such as operating manuals and sales brochures are eligible for copyright protection.

Trademarks

- = any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those product or services from others. - Trademarks also provide consumers with useful information. - For example, consumers know what to expect when they see a Macy's store.

4 types of patents: business model patent

- A relatively new type of utility patent - A business method patent is a patent that protects an invention that is or facilitates a method of doing business - Essentially a patent on a process

The most notable business method patents that have been awarded

- Amazon.com's one-click ordering system. - Priceline.com's "name-your-price" business model. - Netflix's method for allowing customers to set up a rental list of movies to be mailed to them

4 types of patents: plant

- Any new varieties of plants that can be reproduced asexually (using plant genetics). - 20 years from the date of the original application.

How to Obtain a Copyright

- Copyright law protects any work of authorship the moment it assumes a tangible form. - Technically, it is not necessary to provide a copyright notice or register work with the U.S. Copyright Office. - The following steps can be taken, however, to enhance copyright protection. - Copyright protection can be enhanced by attaching the copyright notice to something. - Further protection can be obtained by registering the work with the U.S. Copyright Office.

Why do patents exist?

- Give inventors and their investors the opportunity to recoup the costs (time and money) they incur while creating the invention - if there was no patent protection, there would be no incentive for inventors to take the risk to create new products - Ex. the pharmaceutical industry - After patents expire, anyone can use, make, or sell the invention

4 main types of patents: design

- Invention of new, original, and ornamental design for manufactured products.(Must still be novel and non-obvious.) - Duration: 4 years from the date of the original application.

4 main types of patents : utility

- New or useful process, machine, manufacturer, or composition of material or any new and useful improvement thereof. - Duration: 20 years from the date of the original application.

What Qualifies for Trade Secret Protection?

- Not all information qualifies for trade secret protection. - In general, information that is known to the public or that competitors can discover through legal means doesn't qualify for trade secret protection. - Companies protect trade secrets through physical measures and written documents. - For example: coke

Provisional Patent Application

- Provides the means of establishing an early filing date for a non provisional patent application. - Is like a place-holder in the patent process - Also provides the inventor with the right to use the phrase "patent pending" - is null and void if not filed correctly12

pattern in patents

- Since Patent #1 was granted in 1790, the U.S. Patent & Trademark Office has granted over six million patents. - Note: it now takes an average of 35.3 months from the date of first filing to receive a U.S. patent. - So file early!

The Idea-Expression Dichotomy

- The main exclusion is that copyright laws cannot protect ideas. - For example, an entrepreneur may have the idea to open a soccer-themed restaurant. The idea itself is not eligible for copyright protection. However, if the entrepreneur writes down specifically what his or her soccer-themed restaurant will look like and how it will operate, that description is copyrightable. - The legal principle describing this concept is called the idea-expression dichotomy. - ** An idea is not copyrightable, but the specific expression of an idea is.

The Importance of Intellectual Property

- Traditionally, physical assets, such as land, buildings, and equipment were the most important to organizations - In the modern economy, however, a company's intellectual assets are often the most important. - Investors will often ask, "what's proprietary about your product/service?"

Intellectual Property (IP)

- What is it? A venture's intangible assets and human capital, including inventions that can be protected from being freely used or copied by others - Referred to as "intellectual" property because it is the product of human imagination, creativity, and inventiveness - it is an asset that is mostly intangible

Patents

- 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. - Patent owners have a legal monopoly until the patent expires

Other Methods for Protecting Intellectual Property Rights: Confidential Disclosure Agreements:

- documents used to protect an idea or other forms of intellectual property when disclosure must be made to another individual or organization - Ex. Employment Contracts: agreements between an employer and employee whereby the employer employs the employee in exchange for the employee agreeing to keep confidential information secret and to assign ideas and inventions to the employer

exclusions from trademark protection

- immoral or scandalous matter (bad words) - deceptive matter (Labeling oranges "Fresh Florida Oranges" that aren't grown in Florida) - descriptive marks (Phrases like "golf ball" and "fried chicken" are descriptive and can't be trademarked) - surnames (Common surnames like "Anderson" or "Smith" can't be trademarked)

Three Basic Requirements for Obtaining a Patent : novel

- it must be different from what has come before (not in the "prior art")

what is protected by a copyright?

- literary works - computer software - pantomimes and choreographic works - musical compositions - dramatic works - pictorial, graphic, and sculptural works

How do You Obtain or Disclose a Trademark (or ™)?

- no formal government procedure exists for establishing a trademark - ownership is established by being first to use the mark on products - a trademark can be lost if the mark becomes a generic term or label (e.g., "aspirin," "cellophane," "escalator", "zipper" ... "google?") - products with federally registered trademarks show the trademark accompanied by ®

what is protected under trademark law

- words (youtube, zipcar) - numbers and letters ( 3M, MSNBC, 1-800-FLOWERS) - designs and logos (nike swoosh logo) - sounds (MGM"S lion's roar) - fragrances (Stationery treated with a special fragrance) - shapes (unique shape of apple iphone - colors (nexium the "purple pill") - trade dress (the layout and decor of a restaurant)

Three Basic Requirements for Obtaining a Patent : not obvious

-- it must be not obvious to a person or ordinary skill in a field

Patent Infringement

Takes place when one party engages in the unauthorized use of another party's patent. - The tough part (particularly from a small entrepreneurial firm's point of view) is that patent infringement cases are costly to litigate. - A typical patent infringement case costs each side over $100K to litigate

the process of obtaining a trademark: step 3

create rights in the trademark

Three Basic Requirements for Obtaining a Patent : useful

it must have utility

the process of obtaining a trademark: step 2

perform a trademark search

the process of obtaining a trademark: step 1

select an appropriate mark