March 2006 Pre Dinner Presentaion
The Meaning of Intellectual Property Presented by Charles Dennis
Charles Dennis describes himself as a recovering attorney. His training is as a lawyer, but he has spent most of his recent career managing the business aspects of intellectual property (IP).
Most people associate IP with patents. However, IP also includes copyrights, trademarks, and trade secrets. All of these except trade secrets are legal entities that give the owner some legal distinction from everybody else. IP is also a legally tangible entity in that it can be bought, sold, traded or subject to court jurisdiction.
One example of IP is a copyright. A copy right is used to protect an idea or expression from being copied by someone else. Copyrights are easy to obtain and can last up to 100 years or longer. A copyright protects the idea or expression, but not the data resulting from the idea or expression. Nike’s “Just Do It” and Ford’s “Quality is Job One” are examples of copyrights. Nike and Ford copyrighted these expressions because they are so closely associated with these companies that they want to prevent others from gaining a benefit by using their expressions. Some of the most valuable copyrights are for songs and lyrics, as well as books.
A trademark protects a company’s reputation and is used to define its image to the public. A trademark allows the IP owner to stop anyone else from using a similar name or symbol that will likely confuse people. Virtually all well known names and symbols are trademarked. Examples are “Sears” and “Craftsman Tools”, “Ronald McDonald” and Target’s Bulls-eye. Others are Chevrolet’s “bow tie” or company names like “IBM”. The danger to trademarks is they become so widely used that they become generic. In such cases the owners become in danger of losing their trademark. Examples are when we refer to all photocopies as “Xeroxs” (as in “go Xerox this for me”), or referring to all tissues are as Kleenex. The words refrigerator and aspirin are cases where the trademark has been lost via generic over use.
A Patent is different from either a copyright or a trademark. A patent protects a specific way of solving a problem and gives its owner the right to exclude everyone else from copying that concept. A patent must be useful, be a new and novel idea, and not be obvious. Not being obvious means the idea must go beyond what a person skilled in that field would likely think of. A patent may take several years to get and it usually lasts 20 years. The patent will have a number, a date, title, inventor name, owner name, abstract, drawing, references to other patents, and summary.
The downside to a patent is it is only good in the country where it is issued; thus one may need to obtain patents in several countries to protect valuable commercial ideas. Patents are also quite expensive to get (at least $20,000) and in most countries they require periodic fees be paid to keep them in force. Good record keeping is important when applying for a patent because the patent granting office requires evidence of inventorship and sometimes the date when the invention occurred. This is very important in the U.S. where the first person to invent something gets the patent. In the rest of the world, the first person to file the application gets the patent. Also it is important to file the patent application before making any commercial sales. You can lose the patent if you publicly disclosure an idea by testing it or even making contracts for manufacturing prototypes before you file for the patent. An important aspect of patents is ownership. The inventor(s) are the default owners of a patent, but very few patents are owned by individuals. There are two reasons for this. One is that few individuals want to, or can, pay the large costs to obtain a patent. The second is that a lot of inventions are made by people working for companies. If it is part of your job to invent things, the employer legally owns the invention.
Trade secrets are the last major type of IP. However, trade secrets are fundamentally different from the other types mentioned above. Trade secrets are simply things a company or enterprise considers as important and chooses to keep secret. This can include anything from the process to make something, or the way to solve a problem, to a list of key customers. The advantage is that no one needs to concur with the decision to declare something a trade secret. The downside is that if the secret gets out, it is simply lost. People attempt to protect trade secrets via confidentiality agreements and other legal contracts, but such legal maneuvers cannot guarantee the secret will be kept. One other limitation of a trade secret is if someone else figures out the secret without any help from the IP owner, they are free to do whatever they want with the information. In most cases it is risky to depend upon a trade secret for important IP. The best known trade secret is the formula for Coca Cola, which has been a trade secret for over a hundred years.
In general is should be apparent that there are several important forms of IP. The commonality is that they all involved things that are important to a commercial enterprise. A successful company will manage all of its IP in a way to maximize the value in protecting its secrets, inventions, image and how the company is perceived.