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by Paige Zandri, Attorney Network Director at Priori Legal
Entrepreneurs, by nature, must juggle a lot of skills: tenacity, flexibility, assertiveness, and creativity, to start. What marks a highly successful entrepreneurial venture is often a market-disrupting idea born from these skills. This idea is a tremendous asset, and protecting it is critical to any go-to-market strategy. After all, building a business by marketing your idea, finding partners, hiring contractors and seeking financing all create opportunities for your idea to be stolen. Unless you have baked in the proper IP protection, it’s far too easy for a great idea to be replicated and for you to be out of the game before even getting started.
An intellectual property lawyer can help you identify all your IP assets and develop a comprehensive legal framework with strategies to mitigate your risk and exposure. The following are four classes of protected IP: trademarks, patents, copyrights, and trade secrets.
Trademark protection applies to distinctive marks that make your product easily identifiable in the market. Think of your logo, brand name or even distinct product packaging. You can obtain limited common law protection by simply using a trademark in commerce. However, registering your trademark with the United States Patent and Trademark Office (USPTO) offers protection under federal law and increases the remedies available to you if someone infringes on your trademark.
It’s important to understand that trademarks are granted according to “class” or designation by the USPTO and each class must be identified in your trademark application. This means that if you apply for a trademark for the brand name of your jewelry line, you will have to also apply for the trademark in a second class should you want that protection to extend to your clothing line under the same brand name.
Also, a comprehensive trademark search is highly recommended before submitting a trademark application to the USPTO, or even before using a trademark in commerce. This will inform you of other companies using the same mark and significantly reduce your risk of an infringement action against you and potentially having to dial-back operations to remedy the mistake.
Industry-disrupting technology is a common way entrepreneurs build a company. Federal patent protection through registration with the USPTO grants your company the exclusive right to make, use, sell, or import your invention or discovery for an established time period in the United States. You can also protect your technology abroad through foreign patents in any countries where you want the same exclusive patent rights. The Patent Cooperation Treaty allows you to easily file a single international patent application that can confer national patent protection in all 148 member countries.
Wherever you choose to file, however, the conditions to qualify for a patent are roughly the same. Any patented technology must be novel, useful, and nonobvious. The qualifications may seem easy to meet, but unfortunately patents can be quite tricky to file successfully—and you have no legal protection for your invention until you do. The United States operates under a first-to-file, not a first-to-create system, which means that the inventor with the earliest filing date will get the rights to the patent, regardless of when the technology was developed. This means your filing date is critical. Many entrepreneurs preserve an earlier filing date by first filing for an easier-to-secure provisional patent and the completing the non-provisional patent application process within the allocated year.
Not all technology is patentable, of course. Software code is an entrepreneurial innovation considered to be an original creative works, not an invention. Original creations are protected by copyrights under Federal copyright statute. Copyrights provide protection for “original works of authorship” fixed in a tangible medium of expression. This includes poetry, novels, films, art, and songs, as well as advertising copy, graphic art, designs, computer software, source code, and architecture.
Once you hold the copyright for a work, you can prevent others from selling, performing, adapting, or reproducing your work and substantially similar work without permission. Remember, though, that copyright protection is limited to the same form of expression and not does not extend to the underlying facts, ideas, or methods of operation
Technically, copyrights are automatically granted upon the creation of any new creative work, but registering a copyright formally with the United States Copyright Office provides stronger IP protections. Registration creates a public record of the copyright, establishes certain presumptions of its validity, and gives your startup the right to bring a lawsuit for infringement. If another company is using your work without license, you can file a claim in court to prevent further use and even collect statutory damages and attorney’s fees. Further registration with U.S. Customs also allows you to prevent the importation of infringing copies of your work into the country.
Of course, an entrepreneur’s competitive advantage isn’t just limited to tangible IP. Proprietary business information such as customer lists, manufacturing techniques, procedures, and future plans for development can be just as, if not more, valuable than patents, trademarks, and copyrights. Trade secrets protect how you do business in a way that makes you competitive. Most state’s trade secret laws are modeled after the Uniform Trade Secrets Act, which provides protection for your company’s trade secrets if:
- The information is a formula, pattern, compilation, program, device, method, technique, process or other protected category of IP;
- The fact that this information is not known or readily ascertainable by competitors provides the company with actual or potential economic value; and
- The company takes reasonable effort to maintain the secrecy of such information.
Non-disclosure agreements (NDAs) are a common and effective way to protect your trade secrets. They set out rights and duties relating to confidential information and give you leverage in case of misappropriation of your trade secrets. Misappropriation, a form of illegal, unfair competition, occurs when a trade secret is acquired by breach of confidence or other improper means, and is actionable in court. When you are pursuing a misappropriation claim, a court may consider how extensively you used NDAs in determining whether you made a reasonable effort to maintain the secrecy of your information.
As an entrepreneur, you must be a step ahead of the competition, which means you need robust IP protection in place as early as possible. Consider finding an IP attorney you trust to ensure a comprehensive IP strategy—and make sure that you secure the best IP protections possible for each type of asset.
Paige Zandri, Attorney Network Director at Priori Legal, is responsible for developing the attorney network of high quality lawyers in each of Priori Legal’s operational territories. Paige is a former practicing attorney in NYC and is co-chair of the Solo and Small Firm Practice Committee at the New York County Lawyer’s Association.