Author: Gloria Qiao, Founder & CEO of Trusli
Startups need to establish their strategic advantages and compete effectively with much stronger counterparts. One of the ways for startups to build a barrier of entry is through intellectual property, aka IP. In this article, we will explain in detail how startups establish their strategies in various areas of IP such as trademark, patent, copyright, and trade secret.
1. Trademark – protect your name and slogan
What is a trademark?
The first two things a business needs are to choose and protect its name and brand. Once chosen, the owner of a “distinct mark” must file for trademark protection with the USPTO and use the trademark in commerce. Once granted the trademark, the trademark owner can prevent others from using the same name and can sue for infringement.
Trademarks are granted based on classification.
Trademarks are granted based on “classification” or categories. For example, you can apply for a trademark for “software,” and all the relevant factors discussed below will be considered within that category. Therefore, even though a similar trademark may exist in a different category, you may still be able to get the trademark for an entirely different classification or category.
The strongest trademarks are “fanciful” or “arbitrary”
A key consideration for the USPTO to grant a trademark is to prevent the monopoly of commonly used descriptive or generic words. For example, it would be challenging for a business to secure a trademark such as “findmylawyer” or “bestshoes” under current circumstances. To avoid being considered descriptive or generic, it’s better to come up with either “fanciful” names that have nothing to do with your product or service (e.g., Apple, Amazon) or “arbitrary,” i.e., purely made-up words (“Yahoo”, “Uber”). The next best approach is to use a “suggestive” name that implies or hints at the service or product that your business is offering but does not describe it verbatim. For example, Airbnb implies that you are offering some kind of bed and breakfast service “over the air” but is not descriptive per se.
Consult a trademark lawyer before you start a website or advertising.
Before you start a website or even an advertisement campaign, it’s better to conduct a trademark search and ensure you can secure the mark. With the excitement of creating a new idea, some entrepreneurs rush to secure the website domain and even launch an advertising campaign. It’s much better to consult a trademark lawyer and do some preliminary research about the trademark you plan to use before you jump the gun. This will save you a lot of money and headache down the road. Here at Trusli, we can help you get a credible trademark lawyer at a fraction of the cost. For example, we first thought of using the name “Seeklegal.” After we discussed with our trademark lawyer and she conducted some research, we realized that: 1) similar names exist in our classification and 2) “Seeklegal” means “finding lawyers,” which the USPTO may deem “descriptive.” So we decided to make up our “arbitrary” trademark name of “Sleegal,” which had a much better chance of being trademarked (a long story of why we changed our name from Sleegal to Trusli on a different day).
Getting a trademark is just a first step. You must use it and protect it.
So you hired a trademark attorney, did your research, and filed for your trademark. That’s just the first step. To fully protect your trademark, you must use it and sue the people who try to steal it. Although the first person to use a mark is considered the “owner,” registering a trademark gives you the right to sue in federal court. The first step is to send a “cease and desist” letter, something our trademark lawyers at Trusli can help you do at a very reasonable cost. This would often persuade the infringer to stop using your trademark. If not, then filing a lawsuit is the natural next step. If you don’t enforce your trademark, or worse, if you don’t use it at all, you may be considered to have “abandoned” your trademark after three years.
2. Patent – protect your inventions
Now you have a name, a brand, and a trademark. What’s next?
For many technology companies, patents are the ultimate weapons to create that barrier for the competitors entering your space and snatching up your customers.
What is a patent?
A patent is an exclusive right granted to an invention, which can be a new product or a new way to do something. A patent is by definition granted within a certain territory and time. Once granted, the patent owner has the right to prevent or stop others from commercially exploiting the patented product or invention. A patentable invention must be novel (new or different from prior art), non-obvious (not an obvious variation from prior art), and useful.
There are three types of patents: utility, design, and plant. A utility patent is the most common type, covering processes, the composition of matter, machines, and new and useful manufacturers. One can obtain a utility patent for new and useful improvements to existing products or processes. A design patent is a patent for the shape or configuration of an object. The design must be inseparable from the object to obtain a design patent. It only protects the appearance of an object. To protect the functional or structural features, you must get a utility patent. The last type, a plant patent, specifically protects new and distinctive plants.
How to get a patent?
As mentioned above, a patent is, by definition, territorial. In the US, a patent must be filed with the USPTO. There are two types of filings: provisional and non-provisional. A provisional patent is like a placeholder that starts protecting a new invention from being copied during the 12-month period before a formal patent application is filed. Once filed, you can say that your invention is “patent pending.” A non-provisional patent is an official application that the USPTO reviews and determines whether to grant you the patent. When you file a non-provisional patent, you can also file an international patent application leveraging the Patent Cooperation Treaty.
How long do patents last?
Utility and plant patents last 20 years, while design patents last 15 years in the US. You must pay regular maintenance fees; otherwise, the patent will expire.
What do I do when people try to steal it?
Once granted, you have the right to stop others from trying to make, use, sell, offer to sell, or import the patented invention. If you believe someone is doing any of the above, the first step is to send them a cease and desist letter, demanding them to stop. If they don’t, you can sue them in federal court. Once you prove your patent is infringed, the court can award you damages from the infringement and issue a court order for the infringer to stop. If they still don’t stop, the court can award you three times the actual damages plus attorney fees.
Patent application and patent prosecution are complex and entirely different legal specializations. If you need help with either, here at Trusli, we have built a network of high-quality yet very affordable lawyers to help you protect your invention.
3. Copyright – protect your articles, film, software, architectural work
Copyrights protect any kind of original works of authorship as soon as the author “fixes” the work in a tangible form of expression. Common examples include books, film, architectural drawings, and software codes. Unlike a trademark or patent, copyright does not need to be registered to be protected. In theory, it exists from the moment the work is created. However, to bring a lawsuit for infringement in the US, you must register your copyright.
Although you don’t need to register your work to get copyright protection, registration is recommended because 1) you can have evidence of your copyright on the public record and have a certification 2) registered works may be eligible for statutory damages and attorney fees in later litigation and 3) if registration happens within five years after publication, it’s considered a “prima facie evidence” in the court of law, meaning it’s sufficient unless rebutted.
To get help with registering your copyright, consult a copyright lawyer on Trusli.
4. Trade secret – protect your “secret sauce”
When we discussed the length of patent protection above, some smart readers must be concerned about what happens after the patent expires. To avoid this limited time period of protection, many companies choose not to disclose their secrets in a patent application. A famous example of this is the Coca-Cola formula.
A trade secret can be either technical or commercial. It can also be made up of a combination of elements, which each by itself may not be a secret, but the combination can be.
Unlike a patent, if others develop the same technical or commercial information through their own research, reverse engineering, or market research, the owner of a trade secret cannot stop them. Even worse, if the other person then obtains a patent, the owner of a trade secret can no longer use the trade secret. So it’s a matter of balancing and evaluating the value of the prolonged protection and secrecy vs. the possibility of others driving and then patenting the trade secret.
Common ways to protect trade secrets are through non-disclosure agreements (“NDA”) and non-compete agreements (“NCA”). Of course, maintaining a robust IT security and physical security infrastructure is also very important. Finally, you should control who has access to them, ideally on a “need to know” basis to protect your trade secrets. To get help with NDAs and NCAs, consult a business lawyer at Trusli.