By: BusinessNC
What are patents, trademarks, and copyrights? How does obtaining these intellectual property rights, or “IP” rights, help create value for your business? Unfortunately, there are no short answers to these questions. With that being said, in this article we attempt to make the subject of IP more accessible and provide a pathway to understanding how IP can be used to protect the products that your business has spent blood, sweat, and capital on, and also how it can create growth and value for your business.
A patent issued by the United States Patent and Trademark Office is an IP right that grants the patent owner the right to exclude others from making, using, or selling, or importing the invention covered in the patent. In order to obtain a patent, the invention must be a machine, apparatus, process, plant, or composition of matter. Although abstract ideas or mathematical formulas are not patentable, in some instances software is patentable.
There are several different types of patents, including utility patents, design patents, and plant patents. Utility patents, which include provisional patent applications and non-provisional patents, are by far the most common, followed by design patents. Utility patents protect the functionality of an invention. While a provisional patent application cannot itself become a granted patent, it can be used to establish a filing date and later be used as a basis for a non-provisional patent application claiming priority to the provisional patent application. A non-provisional patent typically has a term of 20 years from the earliest effective filing date, with some adjustment possible for time delays. Periodic maintenance fees are required to keep a non-provisional patent in force. Design patents protect the ornamental design of an invention and have a term of 15 years from the date the patent is issued. No maintenance fees are required to keep a design patent in force.
The most obvious reason for filing a patent application is to protect the years of work and capital invested in your product. Since you or your business invested the time and money in the product, providing an ability to stop others from copying your product is one of the main reasons why patents exist. Obtaining a patent on your product, however, can also help your business in other ways. Patent licensing allows you to give certain rights to others to your invention, for a fee, and can result in extra income without having to invest any additional capital into your own business. Moreover, if your business plan is to be acquired by a larger company or a merger is in your future, having valuable patents in your list of assets can result in a competitive advantage at the negotiating table. Patents can also be used as collateral to obtain new rounds of funding if your business is looking to expand. These are just some examples of how patents can create value for your business beyond the legal monopoly granted by the Patent Office.
Trademarks are IP rights that protect signs, symbols, names, and colors that are source identifiers for products and services. Product configuration trademarks also can be pursued to protect product designs via trademark rights. Although some trademark rights exist without registration, obtaining a federal trademark or service mark registration not only provides a tool that can be used to prevent others from using an identical mark as yours for the same goods, but a federal registration also can be used to prevent others from using a mark that would create a likelihood of confusion. This type of protection is, therefore, quite broad. As long as they are continuously used and have not become generic or cancelled, federal trademark registrations have a term of 10 years and can be renewed in perpetuity. Federal trademark registrations have been granted for particular color combinations, jingles or short musical pieces associated with a business, and even particular scents. The key is that the trademark is used to identify the source of the product or service as that of the entity that owns the trademark.
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