Your company’s intellectual property—from your logo to trade secrets—can be just as valuable as physical assets. This is particularly true for digital startups. Yet, taking the necessary legal steps to protect your intellectual property can be costly and time-consuming, often burdening a young business before it gets off the ground. It’s a delicate balance to determine what actions to take and when, but the following is a primer on the various types of intellectual property.
A trademark is a word, phrase, name or symbol that identifies the source of a product or service and distinguishes it from competitors. A trademark would apply to your company name, product names, logos, and taglines.
Trademarks don’t actually have to be registered with the USPTO (U.S. Patent and Trademark Office). If your company creates a logo or name that you want to use exclusively, you can attach the TM symbol and this essentially gives you “common law” rights. However, in case anyone ends up using your name or logo without your permission, you’ve got a much better chance of winning an infringement suit against them if you actually registered your trademark. And with formal trademark registration, it’s also exponentially easier for you to recover your digital properties—for example, if someone happens to be using a close variation of your domain name or is using your company name as their Twitter handle.
When it comes to trademarking, there’s often some confusion surrounding the company name. Many young companies think that once they incorporate or form an LLC, they have registered and protected their name. The act of incorporating does indeed register your business name within your state of incorporation—but that won’t stop someone else from using your name in any of the 49 other states.
To register your business name, you’ll need to file an application either directly with the USPTO or have an online legal filing service file it for you. Expect to pay approximately $325 in application fees per class that your mark would fall under. The process can take anywhere from six months to a year once you submit your application. It’s also smart to perform a comprehensive trademark search before starting the application process to make sure your name is available (you won’t get an application refund just because your name isn’t available).
A copyright protects “original works of authorships.” For digital startups, this typically means website copy, marketing material and possibly even computer code.
By law, a copyright exists the moment something is written, photographed, drawn, etc. As soon as you write and publish the copy on your website, you automatically own a copyright for this work—and are able to use the copyright symbol © and the terminology “All Rights Reserved.”
If copyright protection exists without registration, why register? Formal registration is a prerequisite if you decide to sue someone for copyright infringement. That’s because copyright registration gives you a public record of ownership.
You can register online through the U.S. Copyright Office or have a legal online filing service handle it for you. Registering a copyright is relatively straightforward and affordable. So if it’s important to you to have the ability to take legal action in case someone copies part of your rebsite or whitepaper without your permission, then it makes sense to register a copyright.
A patent gives an inventor the exclusive rights to manufacture, use or sell an invention for a certain number of years. Patents cover tangible things, and can include software processes, product design and other inventions. For example, Twitter has a patent on the "pull-to-refresh" function found in Twitter's iPhone app, while Coca-Cola patented the unique shape of its original bottle.
Before applying for a patent, you should ask yourself the following questions: Is your product or idea original? Is it useful? And is it not obvious to others with basic skills in your field? For example, Amazon's patent for its one-click ordering system was rejected by the European Patent Office (EPO) for being too obvious and non-inventive.
When you register your invention with the government, you get the legal right to exclude anyone else from manufacturing or marketing it. You also get to use terminology like "patented technology" or "patent-pending technology" (for a provisional patent) in your marketing material. And patents have value—they can be sold as assets and are often factored into funding or acquisition deals.
Acquiring a patent can take up to six years and hundreds of hours of work. Due to the complexity of the process, most companies turn to an attorney, patent agent or licensing firm—this can mean approximately $7,000 to $15,000 in attorney fees. Ideally, your IP pro will understand and specialize in your particular market, which can make the process more efficient.
Because the investment required to file a patent is so high, many startups struggle to know the right time to apply. While there’s no single right answer for everyone, keep the following things in mind.
When you submit your paperwork to the U.S. Patent and Trademark Office, you secure your priority date. This means that if another company starts doing something similar after your filing date, they’re infringing on your patent (and could be ordered to stop). If you wait—perhaps until your product is ready to launch or your company has more cash flow—you won’t have a case if someone starts doing what your patent is about. And you miss the opportunity to patent the idea or product.
In some cases, a company can spend thousands on getting a patent, only to discover that their product is not commercially viable. Or in other cases, by the time the product is finally ready for market, it has gone through so many iterations, that it’s no longer completely covered by the original patent, and the company needs to apply for a brand new patent or Continuation-In-Part application.
Be aware that the USPTO also gives you the option to file for a provisional patent. This entails a simpler and lower-cost filing procedure and lets you stake your claim for 12 months from the filing date. However, this 12-month period is non-renewable, so you’ve got to file a full patent application within the year.
No matter which IP strategy is right for you, it’s best to evaluate your options and plan your strategy early on. Filing for a trademark or copyright is often simple enough to take care of on your own or with the help of an online filing service. If patenting is in the cards, it’s best to search out a reputable patent attorney to discuss your options in your company’s early days so you’re not scrambling at the last minute.