This article is originally published at UpCounsel.
Copyrights, trademarks, patents, and licenses are each a different form of intellectual property (IP) rights protection recognized by U.S. law. The distinctions among them can be subtle and often the same product or service may involve more than one of these IP rights. How can you tell them apart when deciding how to protect your company’s assets? Here’s how.
Copyright protects the rights of “authors” in their original creative works. Copyrightable works include artistic creations, like novels, paintings, films, and songs, but also business-related works like software code, website designs, architectural drawings, marketing reports, and product manuals.
The author of a copyrighted work has the exclusive right to:
•Reproduce (print or copy), publish, perform, display, film and/or record the creative content.
•Create derivative works from the original work (for example, updates, revisions, summaries, translations, and adaptations).
Copyright protection arises automatically at the time the work is fixed in tangible form, either directly or through use of a machine, like a computer or movie projector. Copyrights have a term equal to the life of the author plus 70 years. If a company is the owner of the copyright, it has a term equal to 95 years after the date the work is first made public.
Copyrighted works can be registered with the U.S. Copyright Office. Registration is optional but highly recommended. Registration provides legal benefits to the author, including the ability to enforce the copyright against infringers in court. Copyrighted works (registered and unregistered) can display the © symbol to provide notice that the author considers the work to be protected by copyright.
A trademark is a symbol, word, slogan, design, color, or logo that identifies the source of a product or service, and distinguishes it from those made or provided by others. Trademarks can represent:
•The product or service itself (ex. iPhone)
•A feature or element of the product or service (ex. FaceTime)
•The manufacturer or provider of the product or service (ex. Apple).
A “service mark” is a trademark that identifies a service instead of a tangible product.
The owner of a trademark has the right to prevent infringers from unfairly competing with the owner by using marks that are “confusingly similar.” In the United States, trademark rights can arise in two ways:
•Automatically by use of the trademark in the marketplace in connection with a product or service (“common law” or unregistered trademarks).
•By registration of the trademark with the U.S. Patent and Trademark Office (PTO) (“registered” trademarks).
Although not required by law, registering a trademark with the PTO confers many benefits on the trademark owner. For example, a U.S. trademark registration gives the owner nationwide rights to use the mark in connection with the goods and services included in the registration. Common law trademarks only create rights in the specific geographic territories where the owner is actually using it.
Common law trademarks can be used with the ℠ or ™ symbols. Registered trademarks can be used with the ® symbol. Both types of trademarks are valid so long as your business continues to use them. However, registered trademarks must be renewed periodically with the PTO.
Patents protect the rights of inventors. A patent is a 20-year exclusive property right granted by the PTO for an invention.
A patent entitles you to exclude others from making, using, or selling your invention. Once your patent is issued, you have an obligation to enforce it against unauthorized third parties violating your rights. If you don’t, a court can declare your patent “abandoned” and unenforceable.
Most patents are utility patents that protect “any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof.” To obtain a utility patent, you will need to prove to the PTO, through claims in your patent application, that your invention is useful, novel and non-obvious. Other types of patents often sought by businesses include:
•Design patents, which concern “new, original, and ornamental design embodied in or applied to an article of manufacture” not affecting the article’s function;
•Business method patents, which protect new methods of doing business, such as those used in banking, tax compliance and e-commerce, for example; and
•Plant patents, which protect invented or discovered asexually reproduced plants that are new and distinct.
Licenses are contracts that transfer IP rights from the owner of the rights (the Licensor) to a third party who wants to use them (the Licensee). They can be exclusive (rights are granted to only one Licensee) or non-exclusive (rights are granted to multiple Licensees). A Licensee typically pays the Licensor a royalty in exchange for the right to use the IP rights. Royalties are usually based on a percentage of the revenue the Licensee generates from the sale of products using the licensed IP rights.
Licenses can be valuable assets for your business. For the Licensor, licenses can generate significant revenue stream from royalty payments. For the Licensee, licenses can enable it to sell superior products in the marketplace.
Licenses are usually drafted to provide for a fixed term (say, three years) and must be renewed by the parties to extend the term. Renewal is sometimes conditioned on payment of minimum royalties.
Can a Product or Service Have Multiple Forms of IP?
Yes. For example, a mobile phone might use technology (data encryption) and include features (a camera) that have been patented. The phone may be marketed under a brand name that has a registered trademark. The look and feel of the phone’s home screen design may be the subject of a copyright registration. If the phone’s manufacturer hasn’t created all of the phone’s IP by itself, it may have licensed some of the IP from others.
Images are another case where multiple forms of rights protection may be needed. Copyright protection for an image is common, but trademark protection may be required if the image is used to identify the source of a specific product or service. Similarly, clothing may present multiple rights protection issues. For example, artwork that may be printed, embroidered, or silk-screened on clothing (hats, t-shirts, etc.) may require copyright and/or trademark protection.