Protecting Your Brand With Trademarks, Copyrights and Patents!

“Who steals my purse, steals trash . . .;
but he that filches from me my good name
robs me of that which not enriches him
and makes me poor indeed.”

-  Othello,  Shakespeare

What is a Trademark?

A trademark can be words, devices, symbols or a composite of any two or more. It can also be sounds, smells, colors, buildings, package shapes. A trademark helps distinguish your goods or services from others. There is no requirement to register a trademark to be protectable but registration does increase protection. Trademark registration is cheap, but it’s not automatic. The cost is on the order of $1000 for a typical application, and an additional $3000-$5000 in prosecution to achieve registration.

Pros: Relatively inexpensive; term is in force so long as used in commerce.

Cons: Non-use, non-enforcement can destroy mark (e.g., Escalator, Linoleum, Kerosene, Cellophane, Thermos, Aspirin, Yo-Yo and Bikini).

What is a Copyright?

A copyright can be literary works, motion pictures and other audio visual works, musical works (including accompanying words), sound recordings, software, plans and designs, semiconductor masks, etc. Registration enables suit against unauthorized copiers in Federal Court and discourages some copiers. Registration is not necessary to use the ©, but is good evidence that you were the first to write, compose, draw or code a particular work.

Pros: Relatively inexpensive, on the order of $1000 for a typical group of registrations, and copyright term is long (life of author + 70 years).

Cons: Thin form of protection; infringement only when expression copied.

Copyright and trademark registrations are “no brainer” business decisions, if they are appropriate. But we need to think hard about patents.  The costs are high so why would we spend that much money for a patent?

Why would I want a patent?

1. To stop others from making, using, or selling your invention.
2. Licensing revenue makes money on your innovation, no matter who is selling it.
3. Marketing the product itself, because we all know that “patented” means “better.”
4. Increasing your company’s valuation.

Apply for a patent immediately unless you want to keep it secret or never want a foreign patent. A patent application should be made within one year (or less) from any public use of invention, offer to sell invention or publication describing the invention. Failure to apply for a patent within one year from any of these events will bar you from ever getting a patent on the invention. The nature of a patent is a complete disclosure of the invention and a 20-year monopoly on it.  Whether this a patent is a good deal, depends on your industry and is determined by pace of change, detectability and reverse engineering.

According to the 2008 Berkley patent survey of entrepreneurs, 76% of venture backed entrepreneurs and 67% of all entrepreneurs say patents are absolutely vital to obtaining funding. In Hsu and Ziedonis’ (2008) fixed-effects regression analysis of 813 financing rounds by 269 American semiconductor firms they found that a doubling of a company’s application stock is associated with a 28% increase in pre-money valuations which translates to a value of $2.3 million per patent in 2008 prices. They also found that the signaling value of patents is greater in earlier financing rounds.

The patent term starts on the issue date and ends twenty years from the earliest effective filing date. A patent grants you the right to exclude others from making, using, selling, offering to sell or importing your invention. It prohibits all use, not just copying.

Pros: Strongest form of protection (protects ideas, not expressions); covers innocent infringers; term is reasonable (20 years from filing date).

Cons: Relatively more expensive and time consuming to obtain and potentially could be on the order of $10,000-$15,000 for an application, and an additional $10,000-$25,000 over five years to get the patent to issue.

Note: The information provided in this post is not legal advice and I am not an attorney. If you want legal advice, please contact a licensed Intellectual Property (IP) attorney in your state who is in good standing with your State’s Bar and seek to establish an attorney-client relationship.