Intellectual Property, also known as “IP,” refers to intangible property that stems from human intellect, and is involved in nearly every business. This may sound confusing for anyone who isn’t an intellectual property lawyer, but you don’t have to be an intellectual property lawyer to start understanding intellectual property. Many business owners don’t put a lot of thought into their IP. However, it's never too early to start managing and protecting your IP, especially when you decide that it is time to hire new employees or independent contractors. Your new hires will help you create patents, design products, market your brand, and build up your clients, all of which involve IP in some form or another. Therefore, this is a critical time for you, as a business owner, to ensure that you retain proper ownership of these IPs to avoid unnecessary losses and disputes with employees and contractors down the road. This article will help you plan your IP wisely as a business owner.

Copyright vs Trademark vs Patent

Although some products like PC games may have more than one IP protection, let’s discuss what the difference is between the most common categories of IPs: copyright vs trademark vs patent. These terms may feel confusing or interchangeable to anyone who isn’t an intellectual property lawyer, but they address different aspects of IP. Knowing the definitions of copyright vs trademark vs patent and the different rules regarding copyright vs trademark vs patent will give you a clearer picture of how to proceed in order to protect your IP. Patents give owners the legal right to exclude others from making, using, or selling their invention for a limited period of time. They generally protect new inventions and processes. For example, a person inventing a new type of engine may seek a patent for their invention. On the other hand, copyrights generally target published and unpublished creative work such as literature, software, art, and architecture, and give owners an exclusive right to copy and distribute their work. A patent and copyright are similar in nature but are for different clients and situations. Lastly, trademarks give owners exclusive use of words, phrases, or designs that identify, distinguish, or point to the origin of a good or service. Many large companies, such as notable fast food companies and clothing brands, have registered trademarks for their company name, logo, and slogans. In the United States, patents and trademarks are registered at the United States Patent and Trademarks Office, or the USPTO, and copyrights are registered through ​​the U.S. Copyright Office at the Library of Congress. You can find the USPTO at https://www.uspto.gov/, and the U.S. Copyright Office at https://www.copyright.gov/. In addition to being different forms of IP, patents, copyrights, and trademarks also have different rules surrounding their application. This article will help you understand and navigate those different rules to find whether trademark vs copyright vs patent protections are best for your business.

Managing intellectual property ownership
Managing Intellectual Property Ownership

1. Patent

Because United States patent law generally favors individual inventors rather than employers, an employer is advised to get a written assignment that will legally acquire ownership of the patent from employees or contractors. A simple example would be:

“The Employee agrees to assign the Employer all present and future rights, title, and interests to all Patents created during their employment.”

“Hire-to-invent” 

Remembering to include this clause may very well negate the need for you to involve further patent lawyers and IP attorneys. If you forget to put this clause in your employment agreement, you could have to rely on the “hire-to-invent,” also known as a “work made for hire” doctrine, to claim equitable ownership. According to this “hire-to-invent” doctrine, the employee or contractor is specially hired to invent for your business and has the implied obligation to assign the invention to you even without a written assignment. But you should be aware that this claim will not help you transfer the legal ownership of the invention to yourself. Instead, it will only be helpful by preventing you from violating their legal ownership, or infringement. 

Shop Right

Moreover, a common law doctrine is known as “Shop Right” grants employers an implied license to use an employee’s patented invention. Under this implied license, an employer could use an employee's patented invention if the employee uses the employer’s materials, tools, or facilities to develop the invention. Let’s use a drug company as an example. This drug company provides the lab, the resources for research, and the necessary equipment for all experiments done by their employees. One day, an employee comes up with a genius idea to use mRNA technology to create a new vaccine. Although this employee may have been hired to do unrelated tasks and didn't sign an IP assignment with this drug company, this company may still have an implied right to use this employee’s mRNA vaccine because the employee used the company’s facilities to invent the vaccine. It is important to keep in mind that this implied license is different from ownership. Having a license is far inferior to owning the patent outright, so having the assignment clause is critical and still, the best move for a business owner to claim proper ownership of the patent. 

2. Copyrights

Certain rules surrounding copyright and patent are similar. As a general rule of thumb, a written IP assignment is always the best method to ensure your Intellectual Property rights, for both copyright and patent. However, as previously stated in the patent section, if the work or the invention in question is within the scope of “work made for hire,” you don't need to worry about your IP ownership too much. You may need to get a copyright lawyer involved, but a court will look into multiple factors, such as the duration of the relationship between you and your employees or contractors, tax treatment, and locations to decide whether the creator is your employee. Just as with patents, work created either within the scope of employment or specially commissioned work will give the employer copyright ownership. This also applies to independent contractors— don’t forget about them. Make sure you and your employee or contractor sign a “work for hire” instrument when the work falls within certain categories. In the case of copyrights, this “work for hire” instrument will allow the employer to be considered the author even if their employee or contractor was the original creator. This differs from patent law, where a “work made for hire” doctrine does not actually confer ownership upon the employer.

3. Trademark

To reiterate, trademarks protect anything that identifies a company, service, or product. The rules and regulations surrounding trademarks, therefore, differ from those of patents and copyrights, which protect original works and inventions. As stated by the USPTO, if you decide to register your trademark federally, it prevents others from registering your trademark or using similar trademarks to identify similar goods and services. As you can see, patents and trademarks are quite different. The main difference between patent and copyright and trademark is that trademarks serve as an identifier while copyrights and patents protect ownership. Knowing the difference between a trademark vs patent and whether a patent vs a trademark will better protect your IP is very important.

“Based on Use”

In the United States, trademark protection and ownership are based on use, rather than creation. This means that for a business if you are the first to use a trademark to identify your services or products, you have ownership of that trademark. An employee or contractor that created the trademark does not retain trademark rights if you are the first to use it. Also, if your employees and contractors use your trademark on behalf of the company, you will still have ownership of the trademark.

Intellectual property is a very important facet of owning a business, and the rules surrounding IP for copyright vs trademark vs patent are numerous and often confusing. When employees or independent contractors create inventions and other work products, as is often the case, keep in mind that the employer’s ownership rights depend on the specific type of work product, and including explicit, written IP clauses is the best method to ensure ownership of IP. However, a decent understanding of how patent vs trademark vs copyright laws work is still vital, as the best course of action will differ on a case-by-case basis. This article provides you with an understanding of the basic protections of intellectual property for your business, but you can learn more about IP in our blog articles and connect with more intellectual property lawyers on Trusli, including trademark attorneys, copyright lawyers, and patent lawyers for your specific needs. We hope this article helps you on your journey as a business owner.

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Gloria Qiao J.D.
CEO

Gloria is the founder of Sleegal.ai, seasoned lawyer, business person and entrepreneur, determined to bring legal help to you at an affordable cost efficiently.

Gloria Qiao J.D.
CEO

Gloria is the founder of Sleegal.ai, seasoned lawyer, business person and entrepreneur, determined to bring legal help to you at an affordable cost efficiently.

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