PATENT, TRADEMARK AND COPYRIGHT PROBLEMS
copyrights and trademarks, as well as know-how or trade secrets, are
often collectively referred to as intellectual property. Many firms
have such property without even being aware of it or of the need to
take measures to protect it.
notions of intellectual property are unrealistic. Some believe, for
example, that having a patent on a product will enable one to succeed
in the marketplace. Consequently, they may spend thousands of dollars
to obtain the exclusive rights to market something that no one wants
or can afford to buy. Others may conclude that intellectual property
protection is not worth the expense and bother.
who may not be interested in protecting their own rights still must
take precautions to avoid infringing on the rights of others. This calls
for more than the avoidance of copying. Copying is unavoidable; it is
a way of life and one way in which we learn. But, one can easily infringe
on the rights of others without deliberately imitating specific features
of goods or services.
addresses the steps newcomers to a market should take to avoid infringement
and when they should take them.
have heard variations on a remark attributed to Ralph Waldo Emerson:
If a man can make a better mousetrap than his neighbor, though he builds
his house in the woods the world will beat a path to his door. To keep
the discussion concrete, let's imagine a present day inventor of a new
mousetrap who not only invents a better mousetrap but is also successful
in marketing it. The higher the inventor's profit margin, the more others
will want to copy his invention. Let's assume that the inventor selects
Figaro as the brand name and actively promotes the product. However,
he does not legally protect his invention, but relies on the consumers'
loyalty, goodwill and brand identification to ensure future sales.
measures to develop loyalty and goodwill may be sufficient until a larger
and better known competitor turns up. For example, what if economies
of scale and lack of development costs mean that the competitor can
sell the same mousetrap for 20 percent less? Goodwill may not be enough
to ensure customer loyalty at a higher price. A patent would be much
more helpful, because it would prevent the competitor from selling the
new trap until well after the original firm had a chance to get on its
feet. This situation illustrates that it is the smaller firm that often
has the most to gain from protecting intellectual property.
as the situation is without patent protection, it could be worse. Let's
assume that customers are so taken by the Figaro promotion that they
are willing to pay the 25 percent premium the firm charges in order
to stay in business. Imagine what would happen if the company had to
stop using that name or had to face an expensive lawsuit. Imagine what
would happen if it turns out that someone else actually has a current
patent on one or more features of the better mousetrap. By failing to
consider the intellectual property of others, the new firm would not
only be forced to stop selling under the name Figaro, but might be forced
to stop selling the mousetrap altogether.
patents - what people usually mean when they use the term patents -
provide 17 years of exclusive rights for inventions that deal with the
way things work. Design patents afford 14 years of protection for significant
improvement in the appearance of useful items, such as car bodies or
furniture. Both of these patents do more than prevent copying; they
forbid the making, using or selling of an invention similar to or the
same as theprotected invention, even though the second invention was
independently created. (Plant patents, which will not be covered in
this discussion, may not give the same protection.)
may actually be a way to avoid infringement. The inventor of the mousetrap
might have avoided potential problems by using technology that was described
in a printed publication, publicly used or on sale. Products that are
on sale and give no notice of patent coverage are relatively free from
the risk of infringement.
trying to market fairly new technology that doesn't appear to be patented
should keep in mind that an inventor has one year from public sale or
disclosure within which to file a patent application. In addition, because
patents often take two or more years to obtain, there is still a chance
that a patent could be issued at a later time. Although there is no
liability for infringement prior to issuance of a patent, a competitor
would have to cease making, using or selling the technology once the
patent was issued, thus risking the loss of both start-up costs and
if our inventor was determined to make a better mousetrap, there would
be no interest in copying something else in the market. Still, before
spending too much time and money on research, the inventor should ensure
that others do not have exclusive rights in the area being explored.
The inventor certainly should not assume that, because a product is
not on the market, it is unpatented. As many independent inventors have
learned to their chagrin, it is usually easier to patent something than
to market it profitably.
should hire a patent attorney or agent to conduct an infringement search.
A patent agent is a technically trained person who has passed a special
examination given by the U.S. Patent and Trademark Office; a patent
lawyer is one permitted to draft contracts and provide other general
legal services. Patent searches can be expensive if one must consult
foreign records; it is much less costly to determine whether technology
is currently patented in the United States. Yet, as we will see, there
is value in going somewhat beyond that point.
might reveal that (1) someone else had a patent that has since expired,
i.e., the information patented is now in the public domain; (2) no current
or expired patents cover the area of proposed research or (3) someone
else has a current patent covering all or part of the proposed design.
Let's consider these potential results in order.
IS IN THE PUBLIC DOMAIN
mousetrap (or an obvious variation) was disclosed in an expired patent,
the inventor is free to manufacture and market it without concern for
the patent laws. Also, even if the inventor didn't find exactly what
he or she originally had in mind, a host of good and freely used ideas
that are even better might have been discovered. These alone could be
worth several times the price of the search in saving research and development
OR MORE ELEMENTS OF THE PROPOSED MOUSETRAP APPEAR TO BE NEW
a thorough search, our inventor's proposed improvements to the mousetrap
seem not only to be novel but also to offer significant advantages over
the prior design, the inventor may seek a patent and/or begin selling
the mousetrap without further ado. If, however, the inventor begins
selling without first filing a patent application, he immediately forfeits
possible protection in many other countries and also forfeits any possibility
of patent rights in the United States after one year.
OF THE PROPOSED DESIGN ARE COVERED BY A CURRENT PATENT
If an unexpired
patent is found to cover any part of the proposed mousetrap design,
the inventor knows that he is not free to use it without a license.
Infringing on a current patent exposes one to a suit for damages as
well as an injunction against future use. Even an injunction might mean
substantial costs, including the loss of current inventory, and a patent
covering even a small feature of the new mousetrap might give rise to
the need to retool. Although deliberate infringement is more serious,
ignorance of others' patents is no defense.
(or brand names) indicate commercial source. Trademarks may be words,
logos or other symbols indicating that goods come from a particular
company. They may even be sounds, three-dimensional symbols (such as
the well-known McDonald's golden arches) or colors. There are also service
marks, which indicate the source of services, and other kinds of marks
that will not be considered here.
patents, one can infringe on another's marks without copying them or
even being in direct competition with their owner. All that is necessary
is to use the same or a similar mark under circumstances in which consumers
may be confused as to the source or sponsorship of the goods or services.
search is the only way to find out whether Figaro or something confusingly
similar is being used by others as a mark for a mousetrap (or perhaps
such things as rodenticides) in the proposed market area. It is also
necessary to determine whether the mark has been registered in the U.S.
Patent and Trademark Office, which could give the registrant rights
well beyond the market areas currently occupied.
two reasons why a search may not be sufficient. First, in the United
States, it is unnecessary for a firm to do more than use a good mark
to have trademark rights in its market area. Consequently, a search
may not locate all such prior users. Second, people may be able to prevent
the use of a potential mark without having used it as a mark themselves;
for example, when a trademark can be associated with others in such
a way that consumers might presume that some kind of relationship might
exist. This is where the mark Figaro would run into trouble.
may recall, Figaro is the name of the cat in the Disney film Pinocchio.
Although the Walt Disney Company does not have a monopoly on the use
of the name, it might nevertheless be able to prevent it from being
used on a mousetrap. If that seems too farfetched, consider the company's
concern if "Mickey" had somehow been part of the mousetrap
provides an owner with the exclusive rights to reproduce a certain work
for a specified period, subject to some basic limits. The term of a
copyright is the lifetime of the author plus 50 years in the case of
identifiable, living authors. Copyrights arise automatically and are
inexpensive to register.
for a prior copyright is probably unnecessary. Copyright infringement
can be avoided by establishing that a work was independently created.
Therefore, records showing independent creation are helpful to avoid
liability. Even with such records, establishing independent creation
may be difficult if the original work was widely disseminated or otherwise
available to the alleged infringer. In one such case, the court held
that, although copying may have been unconscious, the original was nevertheless
the limits to copyright protection is that ideas (compared to expressions)
and technology (computer software aside) are generally not protected.
This means that our inventor is free, at least as far as copyright laws
are concerned, to use any information that can be found in books on
mousetrap designs and to make and sell working copies of anything shown
or described. Copyright gives the owner only the right to prevent reproduction
of the text or drawings themselves.
the inventor wants to use some of that text, for example, in an advertisement?
There is a remote possibility that such use might be protected under
the "fair use" defense, but it would be very unwise to proceed
without getting permission from the copyright holder or seeking expert
overlap the subject matter of copyrights and patents. As long as efforts
have been made to preserve secrecy, a suit may be brought to redress
the misappropriation (or wrongful taking) of almost any kind of information
of competitive value. Misappropriation includes industrial espionage
and breaches of confidential relationships (for example, by former employees),
but it does not include reverse engineering. Thus, a trade secret suit
will not succeed if an aspect of a product's design or construction
was obtained by examining an item purchased in the marketplace. Nor
will a suit be useful against those who independently discover a secret
process or recompile commercially valuable information.
of being accused of misappropriating a trade secret is never very high,
particularly if one seeks competent legal advice before using unlicensed
information that has not been obtained through reverse engineering.
FOR EXPERIENCED COUNSEL
admitted to practice in any state in the country is technically qualified
to register trademarks with the U.S. Patent and Trademark Office or
copyrights with the U.S. Copyright Office in Washington D.C. Unlike
the situation with patents, no special examination is given to determine
whether the attorney is familiar with the copyright or trademark law
or registration procedures, for example. Clients are advised to seek
an attorney who specializes in such matters.
or not our mousetrap inventor takes measures to preserve the intellectual
property, he or she certainly should avoid infringing on the rights
of others. Although this is not difficult in the case of copyrights
and trade secrets, patents and trademarks are another matter altogether.
it costs precious start-up capital to have patent and trademark searches
performed; however, proceeding in a new venture without doing so is
equivalent to erecting a building or signing a long-term lease without
checking the real estate title. Searches will not make the product appeal
to the public, but they will ensure enjoyment of any hard-won market
success. A patent search is comparatively cheap insurance against the
possible need to retool or to absorb inventory losses. Moreover, a close
look before adopting a trademark is cheaper in the long run than the
cost of advertising and new promotions designed to advise customers
to seek the mousetrap under a new name.
A: FURTHER INFORMATION ON INTELLECTUAL PROPERTY
and Trademark Office, Washington, DC 20231, or the United States Trademark
Association, 6 E. 45th Street, New York, NY 10017.
free or inexpensive booklets.
for independent inventors, "So You Have An Idea", is available
from the Innovation Clinic, 2 White Street, Concord, NH 03301. To order
it send $2.00 and a self-addressed mailing label.
Clinic also has a set of HyperCard stacks (for Macintosh computers)
covering several topics of interest to inventors and small business
owners. These are available for $5.00 and a self-addressed mailing label.
the Copyright Office, Washington, DC 20559, indicating the subject matter
in which you are particularly interested, for example, music or arts.
Trademarks and Copyrights", Lawrence E. Evans, Jr., 1986, Gunn,
Lee and Jackson, Eleven Greenway Plaza, Suite 1616, Houston, TX 77046.
want to consult one or more of the many inventors' handbooks available
at public libraries. One example is "How to
From Your Ideas", Flemming Bank, 1985 ($12.95). Bank and Associates,
P.O. Box 20365, Portland, OR 97220. This is a step-by-step guide that
shows how you can make money by turning your creative ideas into marketable
B: INFORMATION RESOURCES
Business Administration (SBA) The SBA offers an extensive selection
of information on most business management topics, from how to start
a business to exporting your products.
is listed in "The Small Business Directory". For a free copy
contact your nearest SBA office.
offices throughout the country. Consult the U.S. Government section
in your telephone directory for the office nearest you. SBA offers a
number of programs and services, including training and educational
programs, counseling services, financial programs and contract assistance.
Corps of Retired Executives (SCORE), a national organization sponsored
by SBA of over 13,000 volunteer business executives who provide free
counseling, workshops and seminars to prospective and existing small
Business Development Centers (SBDCs), sponsored by the SBA in partnership
with state and local governments, the educational community and the
private sector. They provide assistance, counseling and training to
prospective and existing business people.
Business Institutes (SBIs), organized through SBA on more than 500 college
campuses nationwide. The institutes provide counseling by students and
faculty to small business clients.
information about SBA business development programs and services call
the SBA Small Business Answer Desk at 1-800-8-ASK-SBA (827-5722).
U.S. Government Resources.
on business management and other related topics are available from the
Government Printing Office (GPO). GPO bookstores are located in 24 major
cities and are listed in the Yellow Pages under the "bookstore"
heading. You can request a "Subject Bibliography" by writing
to Government Printing Office, Superintendent of Documents, Washington,
agencies offer publications of interest to small businesses. There is
a nominal fee for some, but most are free. Below is a selected list
of government agencies that provide publications and other services
targeted to small businesses. To get their publications, contact the
regional offices listed in the telephone directory or write to the addresses
Information Center (CIC), P.O. Box 100 Pueblo, CO 81002 The CIC offers
a consumer information catalog of federal publications.
of Congress Copyright Office, Register of Copyrights, Washington, DC
and Trademark Office (PTO), Washington, DC 20231 Public Service Center:
Department of Commerce (DOC), Office of Business Liaison, 14th Street
and Constitution Avenue, NW, Room 5898C, Washington, DC 20230 DOC's
Business Assistance Center provides listings of business opportunities
available in the federal government. This service also will refer businesses
to different programs and services in the DOC and other federal agencies.
Publishers Association, 1101 Connecticut Avenue, NW Suite 901, Washington,
States Trademark Association, 6 E. 45th Street, New York, NY 10017
Information A librarian can help you locate the specific information
you need in reference books. Most libraries have a variety of directories,
indexes and encyclopedias that cover many business topics. They also
have other resources, such as
association information - Ask the librarian to show you a directory
of trade associations. Associations provide a valuable network of resources
to their members through publications and services such as newsletters,
conferences and seminars.
- Many guidebooks, textbooks and manuals on small business are published
annually. To find the names of books not in your local library check
"Books In Print", a directory of books currently available
and newspaper articles - Business and professional magazines provide
information that is more current than that found in books and textbooks.
There are a number of indexes to help you find specific articles in
to books and magazines, many libraries offer free workshops, lend skill-building
tapes and have catalogues and brochures describing continuing education