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New Ideas, Methods and Products Series
Volume II |
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How to Establish Rights in Patents, Trade
Secrets, Trademarks and Copyrights
INTRODUCTION
Once it is determined that
a new idea, product,
or method, is protectable
with one or more
forms of protection - patents,
trade secrets,
trademarks, copyrights
- those rights should
be secured as quickly as
possible. Each of
those forms of protection
is obtained in
a different manner and
provides a different
set of rights.
This primer explains how
to obtain patent,
trademark, trade secret
and copyright protection.
Other primers in the series
discuss: What
things are protectable
by patent, trade secret,
trademark and copyright;
International protection;
Licensing; Employee contracts,
confidential
disclosure agreements,
consultant agreements
and visitor forms; Infringement
and litigation;
The formal procedure for
obtaining patent,
trademark and copyright
protection; Protecting
and licensing biotechnology;
Trade dress:
protection for product
appearance beyond
patent and copyright; False
advertising -
what is and isn't permissible;
Comparative
advertising - what can
you say about your
competition; Software protection
and licensing;
Rights-in-Data, patents
and copyrights under
SBIR and other government
contracts; Tax
and bankruptcy features
of patents, trademarks,
copyrights and trade secrets;
and from invention
to patent: the inventor's
role.
PATENTS - UTILITY
There are three basic kinds
of patents: utility,
design and plant. Utility
patents, which
are the most commonly referred
to, cover
all sorts of things and
methods of making
and using things: computers,
software, circuits,
chemicals, biogenetic advances,
machines,
clothing and much, much
more. (See "New
Ideas, Methods and Products:
I. What's Protectable".)
Patent protection is established
only upon
the issue of a patent on
the invention. The
owner of the patent has
the right to exclude
others from making, using
and selling the
patented invention. Prior
to issue there
are no rights under a patent.
Patents issued
on applications filed before
June 8, 1995
have a term of seventeen
(17) years from
the issue date. Patents
issued on applications
filed after that date have
a term of twenty
(20) years from the application
filing date.
The effort begins when
an inventor or inventors
conceive the invention.
They or a registered
patent attorney on their
behalf will prepare
a patent application and
file it in the U.S.
Patent and Trademark Office.
On the date
that the application is
filed there is a
"patent pending"
but this confers
no rights and no protection.
Protection only
occurs if and when the
Patent Office agrees
that the invention is patentable
and issues
the patent.
The patent application
must contain a complete
and understandable explanation
of the invention.
It does not have to be
a nuts and bolts instruction
manual. It is enough if
the explanation conveys
the inventive concept so
that a person skilled
in the art to which the
invention relates
can make and use the invention
without undue
experimentation. Further,
the explanation
must contain a full description
of the best
mode known by the inventor
for carrying out
the invention. The inventor
cannot, for example,
use the second best embodiment
of the invention
as an illustration for
the patent application
disclosure and keep secret
the best embodiment.
That will make the resulting
patent invalid.
The timing of the filing
of the patent application
is critical. It must be
filed within one
year of the first public
disclosure, public
use, sale or offer for
sale of the invention,
or the filing will be barred
and the opportunity
to obtain a patent forever
lost. This is
known as the one-year period
of grace.
A description of the invention
in a printed
publication is such a public
disclosure.
A mere announcement is
not sufficient, unless
it contains an explanation
of the invention
too. It matters not that
only a few copies
of the publication were
made available so
long as it was an unrestricted
distribution.
Market testing, exhibitions,
even use by
the inventor himself is
a public use sufficient
to start the one-year period
running. There
is an exception: a public
use which was for
experimental purposes will
not start the
year running. This test
as to whether a public
use was an excused experimental
use is rigorous.
The inventor must show
that it was the operation
and function of the invention
that was being
tested, not the appeal
or marketability of
the product containing
the invention. Further,
some evidence of the testing
should be established.
For example, if samples
were sent to potential
customers for evaluation,
it would be well
to show that the customers
returned filled
out evaluation forms and
that the inventor
considered and even made
changes based on
those evaluations.
A sale will bar a patent
even if the invention
is so deep inside a larger
system that it
could not be easily or
ever discovered. If
the device containing the
invention is sold,
that is enough. The notion
is that an inventor
should be given only one
year in which to
file his patent application
after he has
begun to commercially exploit
or attempt
to commercially exploit
his invention. Thus,
the one year period for
filing a patent application
begins to run against an
invention embodied
in a production machine
installed in a locked,
secure room the first time
a device produced
by that machine is sold,
even though the
machine may never be known
or seen by anyone
other than the inventor.
And it is not just
a sale that triggers the
running of the one-year
period. An offer for sale
is enough, even
if the sale is never consummated.
A patent application contains
three basic
parts: drawings showing
an embodiment of
the invention; a written
description of the
embodiment referring to
the drawings; and
one or more claims. The
definition of the
patented invention, the
protected property,
is not what is disclosed
in the drawings
and specification portion
of the application;
they are only the description
of a specific
embodiment. The coverage
of the patent is
defined by the third part
of the application,
the claims.
In order to receive a patent,
the claims
must be novel and unobvious.
Novelty is a
relatively easy standard
to understand: either
a single earlier patent,
publication, or
product shows the entire
invention or the
invention is novel. Obviousness
is somewhat
more difficult to grasp.
Even though an invention
may be novel it may nevertheless
be obvious
and therefore unpatentable.
The test for
obviousness is more subjective:
are the differences
between the invention and
all prior knowledge
including patents, publications
and products
such that the invention
would have been obvious
to a person having ordinary
skill in the
art to which the invention
pertains at the
time the invention was
made? If so, the invention
is not patentable even
if it is novel.
It is the claims that the
U.S. Patent and
Trademark Office Examiner
analyzes and accepts
or rejects in considering
the issuance of
the patent. It is the claims
that must be
looked at to see if someone
infringes a patent.
It is the claims that define
the patent property.
It is important to note
that in the U.S.
a patent must be filed
by the inventor and
no one else. The inventor
is the originator
of the inventive concept.
A project leader
is not by his supervisory
position alone
an inventor of an invention.
Neither is a
technician or engineer
who may have built
the entire first working
model. The inventor
may have sold or assigned
the patent application
to someone else: his employer,
a partner
in some enterprise, a company
he has newly
formed, or one inventor
may sell his interest
to the other. Thus the
inventor or inventors
may not be the owners of
the patent, but
nevertheless it must still
be filed in their
names.
PATENTS - DESIGN
Design patents have a life
of only 14 years
but are otherwise generally
subject to the
same rules as other patents.
That is, the
new and original ornamental
design sought
to be patented must be
novel and unobvious
and must be filed with
one year of the first
public use, publication,
sale or offer for
sale.
PATENTS - PLANT
Plant patents are also
available for inventions
or discoveries in asexual
reproduction of
distinct and new varieties
of plants. This
area of patents has become
much more important
with growth of biotechnology
inventions in
the last few years, especially
as regards
protection of man-made
life forms.
TRADE SECRETS
There is no formal governmental
procedure
for establishing ownership
of a trade secret.
There are two requirements
for establishing
a trade secret: novelty
and secrecy.
There must be some novel
knowledge which
provides an advantage in
business and that
knowledge must be kept
secret. The level
of novelty is not great.
The knowledge must
not be in the public domain.
But the knowledge
could be known generally
and not specifically
and still qualify as a
trade secret. For
example, the identity of
a source of scarce
material or material at
a lower cost or material
which can be delivered
in a shorter time
could be a trade secret
insofar as that is
unknown to your competitors
and gives you
an edge in competing with
them.
Secrecy is essential; without
that there
is no trade secret property.
There are four
primary steps for insuring
secrecy. First,
there should be confidential
disclosure agreements
with all employees, agents,
consultants,
suppliers and anyone else
who will be exposed
to the secret information.
The agreement
should bind them not to
use or disclose the
information without permission.
Second, there
should be security precautions
against third
parties entering the premises
where the trade
secrets are used. Sturdy
locks, perimeter
fences, guards, badges,
visitor sign-in books,
escorts, and designated
off-limit areas are
just some of the ways that
a trade secret
owner exercises control
over the area containing
the trade secrets. Third,
specific documents
containing the trade secrets
should be stamped
with a confidentiality
legend and should
be kept in a secure place
with limited access
such as a safe or locked
drawer or cabinet.
Fourth, the employees,
consultants and others
who are concerned with,
have access to or
knowledge about the trade
secrets should
be told of the existence
of the secrets,
their value to the company,
and the requirement
for secrecy.
Trade secret owners rarely
do all of these
things, but an attempt
must be made to do
enough so that a reasonable
person having
misappropriated the secrets
cannot excuse
his conduct by saying he
didn't know or that
no precautions were ever
taken and there
was no indication that
something was a trade
secret. This is important
because unlike
patents, trade secret protection
provides
no "deed" to
the property.
There is no formal procedure
for establishing
a trade secret, and thus
the necessary steps
for establishing a trade
secret are often
not taken seriously until
a lawsuit is brought
by the owner against one
who has misappropriated
them. In each specific
case the owner must
show that the precautions
taken were adequate.
Trade secret misappropriations
are generally
of two classes: those where
someone who has
a confidential relationship
with the owner
has violated the duty of
confidentiality
and those where someone
under no duty of
confidentiality uses improper
means to discover
the secret.
Theft of trade secrets
issues frequently
arise with respect to the
conduct of ex-employees.
Certainly a good employee
will learn a lot
about the business during
his employment.
And some of that learning
he will take with
him as experience when
he leaves. That can
not be prevented. The question
always is,
did he just come smart
and leave smarter
or did he take certain
defined information
that was peculiarly the
company's?
Trade secrets are extremely
valuable, often
more so than patents, and
form the basis
for lucrative licensing
programs. Care should
be taken to identify and
protect them early
and consistently.
TRADEMARKS
A trademark, unlike a patent,
is established
without any formal governmental
procedure.
Ownership of a trademark
is acquired simply
by being the first to use
the mark on the
goods in commerce. And
it remains the owner's
property in perpetuity
as long as he keeps
using it. A trademark can
be any word or
symbol or combination of
word(s) and symbol(s)
used on the goods to indicate
the source
of the product. The mark
should not be descriptive
of the goods on which the
mark is used.
The mark may be suggestive
of the goods.
It is best to select a
mark which is arbitrary
and fanciful with respect
to the goods. This
is so because everyone,
including competitors,
has a right to use a descriptive
term to
describe their goods. Therefore
exclusive
rights in such a mark cannot
be secured.
A trademark owner should
be careful, too,
to prevent the mark from
becoming generic,
as happened to Aspirin,
Cellophane, Linoleum
and others.
Thus it is not proper to
refer to simply
a Band-Aid or Jello or
Kleenex. The correct
form is Bandaid elastic
bandages; Jello fruit
flavored gelatin dessert;
Kleenex facial
tissues.
It is wise to have a search
done for a proposed
new mark before beginning
to use it to be
sure that the mark is clear
to adopt and
use on the goods. That
is, no one else is
using the same or similar
mark on the same
or similar goods. It is
confusing to customers
and it is expensive to
change a mark and
undertake all new printing,
advertising and
promotional materials when
it is later discovered
that your new mark has
been earlier used
by another.
People generally only speak
of trademarks
but there are other kinds
of marks. A service
mark, for example, is a
word or symbol used
in connection with the
advertising and providing
of services. Blue Cross-Blue
Shield is a
service mark for health
insurance services;
McDonald's is a service
mark for restaurant
services. Ownership in
service marks is established
by advertising the mark
in conjunction with
the services as opposed
to trademarks, where
advertising is insufficient
- the mark must
be used on the goods in
commerce.
While there is no need
to register a mark,
there are benefits associated
with registration
that make it worthwhile.
Registration may
be had in individual states
or a federal
registration may be obtained.
A state registration
applies only in the particular
state that
granted the registration
and requires only
use of the mark in that
state. A federal
registration applies through
all fifty states,
but to qualify the mark
must be used in interstate
or foreign commerce. A
distinct advantage
of federal registration
is that even though
a mark is used across only
one state line,
that is, goods bearing
the mark are in commerce
between one state and another
state or country,
that is enough to establish
federal protection
in all fifty states.
Thus if you are using your
mark in Massachusetts,
New Hampshire and Rhode
Island, for example,
but do not register it
federally, you may
later find yourself blocked
from using your
mark in all other states
if a later user
of the same mark without
knowledge of your
use of the mark federally
registered the
mark as his. That later
user would then have
the right in all other
47 states even though
his actual use may only
have been in Oregon
and California!
While your common law rights
in a trademark
or service mark last forever
as long as you
are properly using the
mark, registration
must be periodically renewed.
Federal registrations
extend for twenty years
(ten years for registrations
filed after November 16,
1989); states vary
but ten years is typical.
Throughout the history
of trademark law in
the U.S., registration
in the U.S. Patent
and Trademark Office followed
the common
law. That is, to establish
ownership of a
trademark one had to use
the mark on the
goods in commerce and to
register the mark
in the U.S. Patent and
Trademark Office one
had to establish that the
mark was indeed
in use.
That has now changed. Beginning
on November
16, 1989, an application
can be filed to
register a mark which is
not yet in use but
which is intended to be
used. After the U.S.
Patent and Trademark Office
examines the
application and determines
that it is registerable,
it will require that the
applicant show active
use within six months.
The six-month period
can be extended if good
cause is shown. Nevertheless,
before registration, even
before actual use,
the mere filing of the
application to register
the mark intended to be
used establishes
greater rights over later
users who actually
used it earlier.
Care must be taken with
trademark properties.
A trademark cannot be simply
sold by itself
or transferred like a desk
or a car or a
patent or copyright. A
trademark must be
sold together with the
business or goodwill
associated with the mark
or the mark will
be abandoned. Further,
if a mark is licensed
for use with a product
or service, provision
must be made for quality
control of that
product or service. That
is, the trademark
owner must require the
licensee to maintain
specific quality levels
for products or services
with which the mark is
used, under penalty
of loss of license. And
the owner must actually
exercise that control through
periodic inspection,
testing or other monitoring
that will assure
the licensee's product
quality is up to the
prescribed level.
Ownership of a mark is
most important in
a business. When Cuisinart
started selling
its food processors it
promoted them vigorously
under the trademark CUISINART.
But a good
part of the success of
the business was due
to the fact that the machines
were sturdily
made by a proud, quality-conscious
French
company, Robot Coupe, who
had been making
the machines for many years
before they became
popular under the mark
Cuisinart among consumers
in the U.S. When price
competition reared
its head, Cuisinart found
cheaper sources.
Robot Coupe owned no patents
and had no other
protection. When Cuisinart
began selling
brand X under its name
Cuisinart, Robot Coupe
was beside itself. A wild
fight ensued through
the courts and across the
pages of major
newspapers in the U.S.,
but to no avail.
The whole market had been
created under the
name Cuisinart and Cuisinart
had the right
to apply its name to any
machine made anywhere
by anyone it chose. Robot
Coupe, whose machine
had helped create the demand
for food processors,
was left holding its chopper.
COPYRIGHT
Under copyright law historically
a copyright
was established by publishing
the work -
a book, painting, music,
software, book,
instruction manual - with
copyright notice,
typically "Copyright",
"Copr.",
or a "(c)" followed
by the year
of first publication and
the name of the
owner. The notice may appear
on the back
of the title page of a
book, on the face
of a manuscript or advertisement,
on the
base of a sculpture. It
must be visible and
legible but it may be placed
so as not to
interfere with the aesthetics
of the work.
If any more than a few
copies of the published
work appeared without the
notice the copyright
would be forfeited forever.
Works that were
unpublished did not need
notice. They were
protected by virtue of
their retention in
secrecy. Publication with
notice was all
that was required. Registration
with the
Copyright Office was not
always necessary.
Under the current law enacted
in 1976, publication
without notice can be cured
if the omission
of the notice is only from
a small number
of copies; registration
of the work with
the Copyright Office is
effected within five
years, and an effort is
made to add the notice
to those copies published
without it. Notice
must be on the work in
all its forms. For
example, for software the
notice should appear
on the screen, in the coding,
on the disk
and on the ROM, wherever
the software is
resident or performing.
In one case an infringer
got away with reading out
copyrighted software
from a ROM because there
was no notice on
the ROM although there
was notice elsewhere.
Presently, under an amendment
to the current
law effective March 1989,
there is no notice
required at all. In order
to become a member
of an international copyright
treaty known
as the Bern Convention,
the United States
had to abolish all formalities
required to
establish copyright in
a work. Now the simple
fact that a work was created,
whether published
or not, establishes the
copyright without
anything more. It is not
clear that this
removal of the need for
notice is retroactive.
Thus new works after March
1989 need not
have notice but those which
were required
to bear notice before the
amendment should,
in the exercise of prudence,
continue to
bear the notice.
While notice is no longer
compulsory, it
is a valuable and worthwhile
practice since
it enables pursuit of innocent
infringers.
That is, an infringer who
did not have actual
notice that the work copied
was copyrighted
is nevertheless liable
if the works bore
copyright notice.
Registration, too, is not
compulsory, but
it too bestows valuable
additional rights.
If the copyright owner
has registered his
copyright then statutory
damages of up to
$150,000 can be recovered
without proof of
actual damages. This can
be a real advantage
in copyright cases where
actual damage can
be difficult and expensive
to prove.
Registration requires filling
out a proper
form and mailing it to
the Copyright Office
with the proper fee and
a deposit of two
copies of the work for
published works, only
one copy if the work if
unpublished. Accommodations
are made for filing valuable
or difficult
deposit copies: deposit
for three-dimensional
works can be effected using
photographs;
deposits for large computer
programs can
be effected using only
the first and last
twenty-five pages. Further,
if the program
contains trade secrets
there is a provision
for obscuring those areas
from the deposit.
The duration of a copyright
is extremely
generous when compared
to the life of a patent.
Copyright in a work extends
for the life
of the author plus 70 years.
For works for
hire, such as would be
the case for a filing
by a corporation, the period
of copyright
is 95 years from first
publication or 120
years from creation, whichever
is shorter.
Work for hire is a critical
issue in copyright
law that should be understood
by all employers,
employees and independent
contractors. A
work for hire occurs when
one party, the
employer, hires another
party, the creator,
to create a new work: a
book, software, a
videotape which is copyrightable
subject
matter. If the creator
is truly an employee
of the employer then the
work is a work for
hire and the employer is
in law the "author"
and owner. If the creator
is anything less
than a bona fide employee,
i.e., if there
is any question that the
creator may be acting
on his own as a free lancer,
or independent
contractor, then the creator,
not the employer,
is the author and owner.
The large gray area
of uncertainty has spawned
many disputes
and lawsuits. To avoid
this have an agreement,
specifically covering who
will be the owner
and who gets what rights,
before any work
starts or money changes
hands. It is just
good business sense. Nothing
is worse for
a business than to find
out too late that
the software or advertising
material they
paid for and rely on so
heavily is not wholly
theirs and can be reproduced
for others,
or for an independent contractor
to find
that the work he labored
so hard on is not
his. Prevent the trouble:
agree in writing
before beginning..
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