The pace of technological change and fierce competition have increased the value of intellectual property (IP) dramatically. For example, the Google trademark has been estimated to be worth $93.3 billion dollars (source). You can use intellectual property rights (IPR), in the form of trade secrets, patents, copyrights and trademarks, to attract investors, increase your market value, and protect your innovations from use by your competitors.
Each type of IPR requires that you take certain affirmative steps to secure it. The following Cooley GO tips will help you decide how and when to use IPR to protect your valuable IP.
Establish a Trade Secret Protection Program.
You can use trade secret law to protect any information, including formulas, software, compilations, devices or processes, that is not generally known and that provides your company with an economic advantage, provided that you take reasonable steps to maintain its secrecy. This means that you must establish a trade secret protection program that keeps your filing and computer systems secure, and implement reasonable measures, including NDAS, to ensure that employees’, contractors’ and other third parties’ use and disclosure of your trade secrets is restricted.
Trade secret law can be used to protect inventions that do not meet the standards required for patent protection. Trade secret law can also be used if you want to protect certain IP for more than the 20 year period provided for patents. The recipe for Coca-Cola, for example, has been protected as a trade secret for over 100 years.
Apply for a Patent.
The holder of a patent can exclude others from making, using or selling the patented invention in the country where the patent is issued for a period of 20 years from the date on which the patent application is filed. You could also preliminarily file a provisional patent application. (Also check out our Provisional Patent Applications FAQ)
Even though ideas cannot be patented, software that applies algorithms as part of a process can be patented. Your company will lose its right to file for patent protection in the U.S. if you don’t file a patent application with the U.S. Patent and Trademark Office (USPTO) within 12 months of the first time you disclose the invention without an NDA or offer the invention for sale (it’s important to remember that “first sale” is broadly defined and can include fundraising for your company). If you disclose the invention to anyone without an NDA before you have filed a patent application, you will immediately lose your right to obtain a patent in many countries.
Rely on Copyright Law.
You can use copyright law to protect any original work of authorship, including software programs, Web sites, documentation, advertisements, brochures, videos and product packaging. Copyright law prevents partial or wholesale copying of your works by your competitors.
Your company will own the copyrights in works created by your employees, but you will not own the copyright in works created by contractors and consultants unless you have included an assignment of copyright in your contractor and consulting agreements.
You don’t need to do anything else to protect your copyrights, although including a copyright notice on your works and registering your most valuable copyrights promptly with the U.S. Copyright Office will provide you with certain important rights, including the right to sue for infringement and to recover statutory damages and attorneys fees from infringers. You should also be sure to register the copyright in any works that you purchase or for which you obtain an exclusive license in order to secure your rights to these works.
Register your Trademarks and Domain Names.
Trademark law lets you protect the unique marks that you develop to brand your products and services from use by others. In the U.S., trademark ownership depends on who uses the trademark first, and registration with the USPTO is not required (although it provides important benefits). In most other countries, however, the first party to register the mark will own the right to use it. In order to avoid investing a lot of money in a mark that turns out to be owned by another company, you will want to identify those areas of the world that are your primary markets and to conduct a thorough search to ensure that your proposed mark is available in those countries. In addition, you will want to determine whether the mark is available as a domain name, and, if so, register the domain as soon as possible.
When dealing with a subject as complicated as IP law, you’re wise to consult with your counsel. This is particularly true at the early stages of your startup. Considering the different types of IPR, and their advantages and disadvantages set forth below, will help you work with counsel to make the right decisions at the right times regarding protection for your company’s valuable IP.