What Is Intellectual Property?
Intellectual Property Comes In Several Varieties
Intellectual property, or "IP," is loosely defined as any property produced as the result of human thought. IP attorneys concentrate their practice in protecting the products of human thought. This protection is expressed through patents, trademarks, trade dress, trade secrets, protection from unfair competition, licensing, franchising, and copyright.
Patent: Patent protects inventions. In the USA, its basis lies in Article I, Section 8, Clause 8 of the US Constitution. The Congress has declared that a patent is a form of personal property (like a car), and the invention it covers is therefore protectable as such.
To obtain a patent, the inventor must show that her invention is new, non-obvious and useful. This is done by filing a complete disclosure with the Patent and Trademark Office of the country where the invention was made, and, in the US, demonstrating to the patent examiner (an employee of the US Patent & Trademark Office) that the patent should be granted. A patent in the United States is valid for 20 years from the date the application was filed.
Only a registered patent practitioner can represent an inventor before the United States Patent and Trademark Office. Nancy Baum Delain, Esq. is a registered patent attorney. The US Patent and Trademark Office is the only entity in the United States that can grant a patent, and patent falls under exclusive federal jurisdiction.
Trademarks, Service Marks, and Trade Dress: Trademarks, service marks, and trade dress identify the source of a good (trademark) or service (service mark). Trade dress "...is essentially [a product's] total image and overall appearance." Jeffrey Milstein, Inc. v. Gregor, Lawlor, Roth, Inc., 58 F.3d 27, 31, 35 U.S.P.Q.2d 1284 (2d Cir. 1995).
Marks can be words (XEROX), designs (the Nike swoosh), colors or combinations of colors, sounds (NBC's chime), or a combination of any or all of these (McDonald's Golden Arches are a combination of color and design). A mark is unique to its owner; the use by a newcomer of a mark that even momentarily confuses the consumer as to the source of a good is considered infringement.
Trademarks can be registered and protected on both the state and federal levels if the owner of the mark meets certain criteria. A federally registered trademark can be protected for as long as it is used in interstate and/or international commerce, but the trademark owner must take definite steps to register it and to keep it registered.
Copyright: Copyright is another form of protection that is mandated by the US Constitution. It protects literary and artistic works (examples include writings, music, sculpture, painting) that are set in a tangible medium, including machine-readable media. In the United States, copyright is protected only at the federal level. It exists from the moment the work is put into a tangible medium. However, in order to obtain the benefits of full protection under the copyright laws, the copyright holder must register the work with the Copyright Office.
Trade Secret: Trade secrets are those methods, processes and inventions that a company chooses not to disclose through the patenting process or otherwise make available to the public. They are protected by keeping the secret. Once disclosed, the protection afforded by the trade secret is lost.
Perhaps the best-known example of a trade secret is the formula for COCA-COLA. The company never patented its formula, thereby avoiding the need for complete disclosure and the lack of protection for the formula after the patent expired. They relied instead on taking extraordinary measures within the company to keep the formula secret - and that strategy has worked for them for far longer than patent protection would have been available. They can, in theory, keep the formula for COKE a secret, protected forever.
Unfair Competition: Unfair competition is any activity that unfairly utilizes the intellectual property of another, or unfairly prevents the owner of intellectual property from developing and profiting from that property. Examples include trademark infringement, patent infringement, plagiarism, and industrial espionage.
Licensing and Franchising: Licensing and franchising are two forms of a contractual arrangement whereby one entity provides consideration (usually payment) to another in order to utilize the intellectual property of that other. The difference between them is the degree of control the licensor exerts over the licensee.
BURGER KING is an example of a franchise. Burger King franchise holders pay money into the Burger King parent corporation, which owns the mark, for the right to open a Burger King restaurant. Thereafter every Burger King franchise must follow the formula provided by the business model: serve the same food and drink, use the Burger King logo and advertising, and so on.
On the other hand, a simple license is exemplified by a situation where the licensee pays to use the IP, but the IP can be deeply embedded in the licensee's own IP, such that the presence of the licensed IP may not be even visible to the end customer. Computer software companies engage frequently in this sort of licensing activity.
Intellectual Property Audit: Intellectual property audits categorize and evaluate the intellectual assets of an organization. They are used for situations where companies merge, go bankrupt, or otherwise acquire or dispose of intellectual assets. They can show "holes" in the target company's intellectual property protection. An attorney with training in intellectual property should be in charge of the team performing the intellectual property audit.
Nancy Baum Delain's article on intellectual property audits appeared in the December, 2003 issue of Les Nouvelles, the flagship publication of the Licensing Executives Society. This article, along with other articles written by Nancy Delain, is available here.