10 Things Business Owners Should Know About Intellectual Property

1. 10 Things Business Owners Should
Know About Intellectual Property
Presented By:
Kelley Clements Keller, Esq.
www.TheKellerLawFirm.com

2. You Should Know …
1.
What Constitutes Intellectual
Property (IP) and Why It is
Important

3. 1. What Constitutes IP
 IP is a legal concept which refers to the products of
human imagination, creativity, and ingenuity that
have value in the marketplace and for which
exclusive rights are recognized.
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4. 1. What Constitutes IP
 Intellectual property is an intangible or
intellectual asset that provides its owner with a
competitive advantage.
 The loss of these assets can be very costly, often
times even more so than loss of physical assets such
as a building, property/inventory, or equipment.
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5. 1. What Constitutes IP
 Examples include inventions, business logos, and
musical compositions.
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6. 1. Why IP Is Important
 IP is not only an important part of a business’s plan
for success, but a vital part of the U.S. economy and
the nation’s competitive advantage in the global
marketplace.

Three Ways Nations Grow Rich
Natural Resources
 Cheap Labor
 Creativity Of Its People

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7. 1. Why IP Is Important

U.S. Constitution – Article 1, Sec. 8, Cl. 8


“To promote the Progress of Science and useful Arts, by securing
for limited Times to Authors and Inventors the exclusive Right to
their respective Writings and Discoveries”
“There is so much of our economy that is linked to branded
products, copyrights. So much of our economy thrives on
creativity.” Former U.S. Commerce Secretary Carlos Gutierrez
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8. You Should Know …
2. The Two Rules of Thumb for
Determining Whether a Piece of
IP is Worth Protecting

9. 2. Deciding Whether to Protect IP
 Is the IP directly related to your competitive
advantage?
 Does the IP have value in the marketplace?
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10. You Should Know …
3. The Four Major Forms of
Intellectual Property

11. 3. The Four Major Forms of IP
 Patents
 Grant from the federal government to exclude others from
making, using and selling an invention for a limited time.
It’s a “contract” between the inventor and the government.

Protects functional items that are useful, novel and
nonobvious.

Scope and Duration of Protection
National (no rights during pendency)
 20 years from date of filing (utility/plant)
 14 years from date of grant (design)

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12. 3. The Four Major Forms of IP
 Trademarks
 Words, phrases, symbols, designs, or a combination
thereof … that distinguish a manufacturer’s or merchant’s
goods from those offered by others.

Scope and Duration of Protection
National
 In perpetuity, so long as in use

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13. 3. The Four Major Forms of IP
 Copyrights
 “Copyright protection subsists in original works of
authorship fixed in any tangible medium.”

Exclusive rights of federal copyright registration – reproduce
the work, prepare derivative works, distribute copies of
the work, perform the work publicly, and display the work
publicly.

Scope and Duration of Protection
National
 Life plus 70 years

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14. 3. The Four Major Forms of IP
 Trade Secrets
 Formula, pattern, physical device, idea, process, or other
information that provides the owner of the information with a
competitive advantage in the marketplace.

Examples include the Coca-Cola formula, WD-40 formula, and
KFC recipe

Scope and Duration of Protection
Worldwide
 Until no longer secret

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15. You Should Know …
4. The Four Types of Patents and
How Patent Protection is
Obtained

16. 4. Patents and Patent Protection
 Utility Patents
 Business Method Patents
 Design Patents
 Plant Patents
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17. 4. Patents and Patent Protection
 Patentable Subject Matter

The Supreme Court has said that patents cover “anything
under the sun that is made by man.” –Diamond v.
Chakrabarty, 447 U.S. 303 (1980) (genetically-engineered
bacteria that broke down crude oil)

Patentability Tests
Usefulness – 35 U.S.C. § 101.
 Novelty – 35 U.S.C. § 102.
 Non-Obviousness – 35 U.S.C. § 103.

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18. 4. Patents and Patent Protection
 What is an Invention?

Conception + Reduction to Practice = Invention
 Who is an Inventor?

Inventorship cannot be determined until the patent
application claims are drafted.

Inventor is one who contributes significantly to conception OR
reduction to practice.
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19. 4. Patents and Patent Protection
 What Does a Patent do?

Patent grants exclude others from:
Making the invention
 Using the invention
 Selling the invention
 Offering the invention for sale
 Importing the invention

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20. You Should Know …
5. The Four Types of Trademarks
and the Requirements for Federal
Registration

21. 5. Types of Trademarks
 Trademarks
 Identify and distinguish the source of a good
 Service Marks
 Identify and distinguish the source of a service
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22. 5. Types of Trademarks
 Collective or Membership Marks
 Used by a cooperative to indicate that goods/services are
provided by a group member.
 Certification Marks
 Used to indicate (“certify”) the quality of goods or
services. The placement of a certification mark on goods or
use in conjunction with services is an assurance to
consumers that the goods and services meet the standards
of the certifying organization.
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23. 5. Types of Trademarks
 Other Forms of Trade Identity:
 Trade Dress
 Encompasses the distinctive “look” of a product. Trade
dress can include product packaging, distinctive restaurant
designs, product configuration or product containers.
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24. 5. Types of Trademarks
 Product Configuration
 The actual design of the product itself (as contrasted with
its packaging). Product configuration is a form of
trade dress. It must be “inherently distinctive” to
be protectable.
 Trade Names
 The names of businesses used to identify corporate identity
as contrasted with the source of a product or service. This can
be confusing since a trade name can be a trademark, but need
not always be, e.g. Coca-Cola Corporation versus CocaCola brand cola.
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25. 5. Requirements - Distinctiveness
 Trademarks Must be Distinctive to Obtain
Federal Registration and Protection

Inherently Distinctive


Its intrinsic nature serves to identify a particular source
Acquired Distinctiveness or Secondary Meaning

Distinctiveness may be acquired through use if the public
comes to recognize the mark as an indicator of source, thus
giving it “secondary meaning”
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26. 5. Requirements - Distinctiveness
 Spectrum of Distinctiveness for Trademarks,
which helps determine the Strength of a Mark





Fanciful or Coined Marks
Arbitrary Marks
Suggestive Marks
Descriptive Marks
Generic Terms
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27. 5. Requirements - Distinctiveness
 Fanciful or Coined
Marks

Marks that do not have
independent meaning
or significance apart from
their existence as a
trademark, aka made-up
words. These are the
strongest marks on the
spectrum of
distinctiveness
For oil and gas products
For copying equipment
For food products
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28. 5. Requirements - Distinctiveness
 Arbitrary Marks

Existing words that are
used in connection with
goods/services that are
wholly unrelated to the
normal meaning of the
word. These are also very
strong marks
For computers
For electronic commerce services
For Internet search engine services
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29. 5. Requirements - Distinctiveness
 Suggestive Marks

Marks that require
thought, imagination,
or perception to identify
the nature of the goods/
services. These are not as
strong as fanciful or
arbitrary marks.
For outdoor clothing and equipment
For tuna
For detergent
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30. 5. Requirements - Distinctiveness
 Descriptive Marks

Terms that immediately
convey an idea of an
ingredient, quality,
characteristic, purpose, or
function of the goods/
services. These are not
protectable as marks
without showing
“acquired
distinctiveness” or
“secondary meaning”
For financial services
NEW YORK LIFE
INSURANCE
COMPANY®
For insurance services
For electronic goods and
retail services
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31. 5. Requirements - Distinctiveness
 Generic Terms

The common name of a
good/service. These
terms can never function
as trademarks:




CEREAL for cereal
MULTISTATE BAR
EXAMININATION for an
attorney competency exam
LIGHT BEER for low-calorie
beer
CRAB HOUSE for restaurant
that serves crab

Examples of formerly
protected trademarks
that are now generic
terms:






ASPIRIN
LINOLEUM
ESCALATOR
CELLOPHANE
ZIPPER
THERMOS
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32. 5. Requirements - Distinctiveness
 Types of Marks that are Protectable through
a Showing of “Acquired Distinctiveness”
or “Secondary Meaning”

Personal Names: AVERY DENNISON for office products,
MCDONALD’S for fast food services, and GALLO for wine

Color, Sound, Scent: color PINK for fiberglass insulation,
“Doink-Doink” sound for Law & Order, peppermint scent
for office supplies
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33. 5. Federal Registration Benefits
 Benefits of Federal Trademark Registration






Prima Facie evidence of validity and ownership
Constructive use conferring nationwide priority as of date
of filing
Constructive notice of the registrant’s ownership of the mark,
e.g. use of the symbol ®
Ability to become incontestable
Improved ability to block importation of infringing goods
Broader array of remedies in an infringement action
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34. You Should Know …
6. The Types of Material Eligible for
Copyright Protection

35. What Copyright Protects
Copyright protects "original works of
authorship" that are fixed in "a tangible
form of expression."
The fixed form does not have to be directly
perceptible so long as it can be communicated
with the aid of a machine or other device.

36. 6. Copyrightable Materials
 Literary Works
 Musical Works
 Dramatic Works
 Pantomimes and choreographic works
 Pictorial, graphic, and sculptural works
 Motion pictures, other audiovisual works and sound
recordings
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37. 6. Copyrightable Materials
 What is NOT copyrightable …
Ideas, concepts, or discoveries
 Titles, names, short phrases, and slogans
 Works that are not fixed in a tangible form of
expression such as improvised speech or dance
 Anything written or created by the US government.

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38. 6. The Bundle of Rights
 What rights does the owner control?
 Reproduction
of the Work
 Prepare of Derivative Works
 Distribution of Copies of the Work
 Public Performances of the Work
 Public Display of the Work
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39. 6. Federal Registration Benefits
 Benefits of Federal Copyright Registration





Prima Facie evidence of validity and ownership
Ability to sue for infringement and seek injunctions
Statutory damages and attorneys’ fees
Preempts the defense of “innocent infringement”
Improved ability to block importation of infringing goods
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40. You Should Know …
7. Legal Vehicles Available for
Trade Secret Protection

41. 7. Trade Secret Protection
 Patchwork of State Laws
 Model: The Uniform Trade Secrets Act (48 States)
 The Economic Espionage Act of 1996
 Criminalizes theft of trade secrets
 Current Legislative Initiatives
 Efforts to create federal civil remedies
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42. You Should Know …
8. The Most Common Types of
Trade Secret Disputes

43. 8. Trade Secret Disputes
 Employer v. former Employee
 “The information was in my head …”
 Lawful discovery v. theft
 Permission
 Independent development
 No longer secret
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44. You Should Know …
9. The Elements of a Trade Secret
Protection Program

45. 9. Trade Secret Protection
 Security Measures
 Consider physical layout of facilities – points of entry
 Areas where sensitive work occurs, etc.
 Confidentiality procedures
 Document control
 Protocols for computer use
 Procedures directed at employees
 Procedures directed at persons out of the company
 Managing, monitoring and assessing the program
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46. You Should Know …
10. How to Measure the Value of
Your IP

47. 10. Valuing Your IP
 Conduct an Intellectual Property Audit

Is our IP being properly protected?
Identify existing patents, trademarks, copyrights, licenses
 Identify works in progress: R&D
 Identify trade secrets and describe how they are being protected


What is the monetary value of our IP?
Investment capital
 Mergers & Acquisitions

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48. Wrapping it Up
Questions?
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49. Thank You!
Kelley Clements Keller, Esq.
(717) 386-5035
kkeller@thekellerlawfirm.com
@KelleyKeller
/YourIPMatters
/KelleyKeller
www.TheKellerLawFirm.com