Realistically, innovators must work within a budget to protect IP. This presentation explores IP basics and considerations when determining whether and how to allocate limited funds for maximum IP protection.
Widget 2.0: Inventors have developed a new and improved widget Started a partnership No employees Hired designers for: Logo Website Product packaging Expecting big sales Instructions: in U.S. and oversees Lots and lots and lots of fine printThe hypothetical is meant to be purely fictitious.Any similarity to real inventions, businesses, etc. is unintended
Inventions Article of Manufacture Process Machine Composition of matter Ornamental design for article of manufacture Plants In Widget 2.0 World: Patent Types, e.g.: (1) Article – the widget Utility (2) Process – method of making (3) Composition – polymer from Design which widget is made Plant
Symbols indicating source, origin, sponsorship, or endorsement of goods or services E.g.: Product name, business name, logo Note: Trademarks often used in domain names (www.trademark.***), but the domain name is not necessarily a trademark In Widget 2.0 World: (1) Plain word mark: WIDGET 2.0 (2) Stylized mark: Note: www.widget.*** - not a trademark
Work of original authorship fixed in tangible form E.g.: packaging, website design, source code, photographs, advertisements In Widget 2.0 World: (1) Product packaging design (2) Website design (3) Logo design Instructions: Lots and lots and lots of fine print
U.S. Patents: Invent File Patent Application w/ U.S.P.T.O. …wait years (~3 yrs, avg.)… CREATION OF Receive issued U.S. patent PATENT RIGHTS (Pay maintenance fees) This is the ONLY path to establishing patent rights for an invention
Trademarks: POTENTIAL Use in commerce in distinctive CREATION OF manner COMMON LAW Optionally… TRADEMARK RIGHTS File Trademark Application (before or after starting use) w/ State CREATION OF REGISTERED w/ U.S.P.T.O. TRADEMARK …wait months (~11 mos., avg.)… RIGHTS Receive Trademark Registration (Renew Registration every 5-10 years)
Copyrights: Fix creative work in tangible form File Copyright Application w/ U.S. Copyright Office CREATION OF COPYRIGHT RIGHTS …wait a few months (2.5 – 6.5 mos., avg.) CREATION OF Receive Registration Certificate ABILITY TO SUE FOR COPYRIGHT INFRINGEMENT Note: Registration is not a prerequisite to having copyright rights, but it is prerequisite to take legal action against an infringer.
(Utility) Patents: Rights: Exclusive right, in the U.S. to: Make, Use, Sell, Offer to sell, and Import the patented invention as claimed Duration: 20 years from earliest filing date (except provisional filing date)
(Utility) Patents: Value of Formal Protection: ONLY means to acquire patent rights & stop others from making/using/ selling/importing the patented invention Can stop patent infringement Something to license – get royalties? Something to assign – sell business? Collateral for loans/investments – build business? Clarify ownership
Trademarks: Rights: Exclusive right, within area*, to stop junior users from adopting or using marks likely to cause confusion Common law: *area = area of actual use State Registration: *area = all of State Federal Registration: *area = all of U.S. Duration – For as long as it is used (registrations maintained)
Trademarks: Values of Formal Protection: Expands constructive area of use – broader trademark rights Avoids conflict? – easier for others to discover your rights Something to license – start franchises? Something to assign – sell business? Clarifies ownership Easier to stop cyber squatters?
Copyrights: Rights: Sole right to Reproduce; Adapt to create derivative works; Distribute copies by sale, rental, lease, lending; Perform/display publicly Duration: Generally: Life of author + 70 years Work Made for Hire: Earlier of 120 yrs after creation or 95 yrs after publication Values: Can stop copyright infringers
Copyrights: Values: Statutory damages ($750-$150,000) … if copyright registered w/i 3 mos. of publication or before infringement begins Required before lawsuit to stop copyright infringer Clarifies ownership In Widget 2.0 World: Something to license/assign Important – because the hired designers (independent Eases licensing? contractors) may own the copyright rights absent an assignment to the business.
U.S. Utility Patents: Application Preparation: ~$2,000-$15,000+ Filing Fees: Nonprovisional: $1,260 ($630 s.e.) (or, 1st, Provisional: $250 ($125)) Prosecution: ~ $2,000-$15,000+ Issue Fees: ~$1,770 ($885) Maintenance Fees: ~$1,130 ($565); ~$2,850 ($1,425); ~$4,730 ($2,365) TOTAL – over period of ~ 20 years ~$18,000 ($12,000) – $35,000 ($30,000)
Utility Patent – Avg. Complexity Start with Nonprovisional $12,000 Nonp. Prep $10,000 & Filing Large Entity Small Entity Cost Incurred $8,000 Maintenance Fees $6,000 Totals over 20 year period: Prosecution to ~ $27,000 large entity $4,000 Allowance ~ $17,000 small entity $2,000 $0 0 2 4 6 8 10 12 14 16 18 20 Time (years)
Utility Patent – Avg. Complexity Start with Provisional $12,000 Prov. App. Prep & Filing $10,000 Nonprov. App. Prep & Filing Cost Incurred $8,000 Large Entity Maintenance Fees Small Entity $6,000 Totals over 21 year period: Prosecution to ~ $30,000 large entity $4,000 Allowance ~ $18,000 small entity $2,000 $- 0 2 4 6 8 10 12 14 16 18 20 Time (years)
Trademarks: Common Law: Free State Registration: ID Sec’y State Fees: $30 Prep. Cost: ~$200-$500 Renewal: $30 every 10 years Federal Registration: USPTO Fees: $275-$375 Prep. Cost: ~$200-$500 Prosecution: ~$200-$500 Renewal: ~$300-$500 @ 5 years and every 10 years thereafter
To File Patent Application: U.S. Patent Protection: 1 year from 1st public disclosure* – not extendable *may include sales, offers for sale, public use, publications, presentations, non-confidential discussions, etc. U.S. Patent System changing in March 2013!! 1st Inventor to File Application No more 1 year grace period on public use, offers for sale, or otherwise making invention available to public ?? Most other countries: No grace period; Barred from patent if application not filed before public disclosure
To File Trademark Application: None – as long as trademark is in use
To File Copyright Application: Generally, none until copyright expires (decades) Generally - Life of author + 70 years Work Made for Hire: Earlier of 120 yrs after creation or 95 yrs after publication However, to get statutory damages – 3 months from publication or before infringement begins
Considerations: Does business’s success rely upon any of: Unique product/services? Good reputation in a highly-competitive market? Selling easily-copied creative work? Is the IP the business uses owned by someone else (e.g., employees, independent contractors)? Is the business going to grow into other markets, states, countries? Will the business be sold or franchised? Does the business want to leverage its assets for funding?
Prioritize Patent Protection as High if: Unique product (or method/composition/etc.) is an important asset Someone with skill in the field of art could copy the product (or method/composition) Competition likely to grow or copy upon examining the product (or method/composition) There is even a slight possibility that the business may want patent protection (Because patent rights may be forever lost if the business/inventor waits too long to file a patent application)
Prioritize Trademark Protection as High if: Reputation is principle selling point Market is highly competitive Trademark (business name, product name, logo, etc.) may be something that a competitor might think of on its own Business wants to stop others from registering website addresses (domain names) using the trademark Business wants to franchise or license others to use the trademark Business knows of another who started using a similar trademark after business adopted its trademark
Prioritize Copyright Protection as High if: Profits rely upon sales or licensing of creative work Business sells a software product and wants to stop others from copying the code Business knows of copying of its creative work by another and the copying is hurting the business
Instructions: Lots and lots and lots of fine print Widget 2.0 Hypothetical: With $15,000 budget: 1) Patent search online - $0 2) Nonprov. Patent App. Prep w/ Search - $10,000 -Widget article; Method of making; & Composition 3) Nonprov. Filing: - $630 4) Trademark Search for WIDGET 2.0 - $800 5) File Trademark App. for WIDGET 2.0 - $850 6) Get design copyrights assignments from designers & register copyrights - $600 TOTAL: $12,880 Start saving for prosecution of trademark application in ~6 mos. & patent application in ~2+ yrs
Instructions: Lots and lots and lots of fine print Widget 2.0 Hypothetical: With $5,000 budget: 1) Patent search online - $0 2) Prov. Patent App. Prep w/ Search - $3,875 3) Prov. Filing - $125 4) Trademark search for WIDGET 2.0 - $800 5) Get copyrights in logo design, website design, and product packaging assigned from designers - $200 TOTAL: $5,000 Start saving for nonprov. patent app. costs w/i 6 mos.-1 yr. & for filing federal trademark application
Instructions: Lots and lots and lots of fine print Widget 2.0 Hypothetical: With $500 budget: 1) Patent search online - $0 2) Independent Prov. Filing - $125 3) Trademark search online - $0 4) Get copyrights in logo design, website design, and product packaging assigned from designers - $200 TOTAL: $325 Start saving for nonprov. patent app. costs w/i 6 mos.-1 yr. & for filing federal trademark application
Instructions: Lots and lots and lots of fine print Find reliable guidance early! Don’t delay in creating an IP Protection Plan There is more than one type of IP protection Budget for an on-going IP protection process A business’s time and effort can save it money if it: Trains employees/contractors to keep good records Provides its IP att’y with all information without delay Responds on time to the Patent/Trademark/Copyright Office Quality counts! Get it right the first time! Mistakes cost money and can mean permanent loss of rights