Your success depends on what you do—building and maintaining a competitive advantage—and your customers and clients knowing who you are. There are four key ways to protect your business’s intellectual property: trade secrets, patents, copyrights, and trademarks.
Trade secrets are your “special sauce”—essentially any confidential business information that gives your business a competitive edge. A trade secret can be a formula, a process, a design, a pattern, a technique, a method, or a compilation of information. The three criteria of a trade secret are (1) that it is information (2) that a business takes reasonable measures to protect (3) that derives independent economic value from not being publicly known. The key piece to a trade secret is that it be kept secret. Businesses can protect trade secrets in a number of ways, including nondisclosure agreements and non-compete agreements. A business should maintain careful control over its trade secrets to prevent losing protection of the information.
In some industries, where businesses develop new products or processes, a patent can be the linchpin of a business’s success. A patent is a set of exclusive rights granted to an inventor for a set period of time in exchange for public disclosure of the invention. Most importantly, a patent protects inventions by allowing the owner of the patent to prevent third parties from making, using, or selling the patented invention.
In order to patent an invention, the invention must meet certain requirements—the invention must be novel, useful, and nonobvious. “Novel” has a very specific legal meaning, but essentially the invention cannot have been known by others, described in a printed publication, or offered for sale prior to seeking a patent. The term “useful” means that the invention must have a purpose. “Nonobviousness” means that the invention must be sufficiently different from what has been used or described before that a person having ordinary skill in the area of technology related to the invention would not find it obvious to make the change.
Copyright protects original artistic and literary works. Copyright itself refers to the group of exclusive rights belonging to the author, which includes the right to copy, distribute, and perform the work. No registration is required for a copyright to exist in the work, and copyright protection begins as soon as the work is fixed in a tangible medium. Copyright requires three key elements: authorship, originality, and fixation. “Authorship” includes almost all original expression (although not the ideas or facts expressed, which cannot receive copyright protection) that are recorded in a tangible form. “Originality” means that the work was independently created. “Fixation” means “any tangible medium of expression.” 17 USC §102(a).
Trademarks are “any word, name, symbol, or device, or any combination thereof” used “to identify and distinguish . . . goods . . . from those manufactured or sold by others and to indicate the source of the goods.” 15 USC §1127. Trademarks apply to goods, whereas service marks apply to services, but the two terms are often used interchangeably. These marks are used to distinguish goods or services of one provider from another, and can include smells, sounds, and colors. Trademarks and service marks gain protection from being used in commerce, meaning that you actually use the mark to apply to your business’s goods and services. However, obtaining state and federal registration of a mark can provide additional protection.
For additional information on these types of intellectual property and to research the uniqueness of your business ideas, the following websites are useful:
Business Name: Secretary of State for individual states