Understand the rights, obligations to protect and use intellectual property.
Businesses hire the employees at Performance Marketing to create original names and concepts for products.
That’s why the company’s employees brainstorm ideas, check their ideas through their own system and verify the originality of the idea through a legal process before presenting ideas to clients to ensure names aren’t already Trademarked or used for another product, says Matt Glynn, the chief operating officer of Performance Marketing in West Des Moines.
“We’ve done a lot of naming for products for different companies through the years,” he says. “We’re working on an internal naming project right now. … We don’t want to fall in love with something and have them say ‘No, you can’t do that.’ ”
For this most recent naming project, the team submitted six potential names to its legal team for review. Three were flagged — including the one preferred by the team — and had to be cut because they were already used in some capacity by another company.
“For all of this, that’s the big thing — to make sure you have a really solid legal team because it can get messy,” Glynn says.
“It” being intellectual property rights, which are the rights given to persons for their creations, according to the World Trade Organization. They can be divided into two main areas:
- Copyright and rights related to copyright. This includes authors of literacy and artistic works, which are protected for at least 50 years after the death of the author. Performers, sound recordings and broadcasting organizations also can be protected through copyright.
- Industrial property.
- This includes distinctive signs such as a trademark, which distinguish goods or services from others.
- It also includes inventions, innovations and other creations that are protected under patents. These items might also be considered trade secrets by the company. The purpose of a patent is to provide protection for investment in an invention/new technology, so there is incentive to finance research and development activities for other technologies.
Business owners, regardless of the type of industry, likely have something that falls under the realm of intellectual property from the secret recipe used for a Mom-and-pop shop’s pizza sauce, to customer lists, to the brains behind a new technology, or even the trademarked logo.
“I think there are a lot of things that a lot of business owners don’t even think about protecting, and they may not recognize the value in protecting some of the intellectual property,” says Tim Zarley, an attorney with Zarley Law Firm in Des Moines, which specializes in helping clients acquire rights to and enforce laws surrounding intellectual property.
Intellectual property rights and laws have multiple variables, which is why professional advice is often recommended and sought by business owners.
“You can shortcut a lot of places, but this is a place that can get really sticky and messy if you try to DIY it,” Glynn with Performance Marketing says.
Business owners need to consider what makes them unique
Legal advisers recommend employers meet with an attorney or legal adviser prior to setting up a business to determine how the business owner will protect his or her intellectual property and to distinguish their company from others’ names and products.
The United States Patent and Trademark Office (www.uspto.gov) provides information and videos about the various types of federal registrations and how they differ, guidelines to selecting the appropriate mark that is federally registrable and legally protectable, as well as the benefits of federal registration.
A business owner who is developing a product will want to consider whether the item has any patentable features to further protect the idea. The patent and trademark office issues patents, based on an application process and fee, to grant the property rights of an invention to the inventor.
The trademark and patent process needs to be completed before an invention is used publicly, sold or any information about it is disclosed, says Chris Holman, a visiting professor of law and the interim director of the Drake Intellectual Property Law Center. The process can be expensive, but it is necessary to protect the secrecy and ownership of the idea. He also recommends businesses register their domain names with the patent and trademark office, especially if the word or phrase identifies the business’ website.
A patent protects the invention because it excludes others from “making, using, offering for sale or selling” the invention in the United States or “importing” the invention into the United States, according to the patent and trademark office.
An attorney also can advise a business owner when picking a name or naming a product to ensure the owner isn’t infringing upon anything that has already been trademarked. A trademark is a brand name and is used, along with or independent from a service mark, to identify and distinguish a good or service of one seller from others. This could include a word, name, symbol, device or any combination.
U.S. copyright law protects the authors of “original works of authorship.” This includes tangible forms such as a photo, artwork, video, a manual, even a T-shirt design, as well as published and unpublished works. (See more in sidebar)
Zarley says once an idea is in tangible form, it doesn’t necessarily need an official copyright with the circle unless the owner wants others to know it is his or her work and to be able to enforce copyright laws. Otherwise, its creation is known as common law copyright. However, if a business owner has a design it intends to sell or a manual or other printed material, it should copyright the item.
Registration of intellectual property provides protections against infringement of use
Registering one’s intellectual property with an official copyright gives the owner the ability to file suit or seek an injunction should the intellectual property be misused or infringed upon.
Copyright is limited in a few ways, according to the patent and trademark office. The Fair Use Doctrine, which was incorporated in the 1976 Copyright Act, allows judges to excuse unauthorized uses of copyright material for criticism, comment, news reporting, teaching, scholarship and research.
Items are protected under copyright for 75 years after the death of the owner. Any use of copyrighted material will need permission before it’s used, Zarley says.
“If you don’t know for sure it’s been released to the public domain, you’re taking a risk by copying it,” he says.
Copyright infringement is the most common violation because many don’t understand how the law works, but it also requires the item to be copied exactly as the original, Zarley says.
Trademark violations can occur when a symbol or name is likely to cause confusion among users, and patent litigation can be expensive because it requires detailed review to determine whether each and every element of a device or piece of equipment has been duplicated, he says.
The National Football League trademarked the term “Super Bowl,” but businesses can still use it when they talk about the Super Bowl, as long as they’re not making it seem as though they’re tied to it, Zarley says. A bar could advertise it’s having a party during the Super Bowl, but it could not advertise its name tied to the trademark as an official event.
“A lot of it depends on the context and the use of these things to determine if it’s fair use,” he says.
In 2007, a court ruled that a dog toy company could use the initials “CV” for its “Chewy Vuiton” dog toys even after the handbag maker Louis Vuitton claimed it infringed upon the company’s trademark and caused confusion because the company makes its own pet products. The court ruled the use was a parody that poked fun at the expense of the handbags and was allowed.
Trade secrets, employee confidentiality another component to consider
Trade secrets can be vital to the success of a business. They are defined as any information with proprietary value that distinguishes the business from its competition. These ideas or methods can be protected so long as it’s not publicly disclosed or independently developed by someone else, Zarley says.
The most famous example is the recipe for Coca-Cola, which has remained secret for more than 100 years even though many have tried to replicate it.
Violations of intellectual property rights occur in all types of industries, especially those that have trade secrets, Holman says. Individuals from other countries receive jobs in the United States for companies and acquire access to secret information and then steal it for companies in their home country, he says.
Violators who are convicted can receive penalties, fines and time in prison. Intellectual property rights are protected through various agencies, including the National Intellectual Property Rights Coordination Center, which works through U.S. Immigration and Customs Enforcement and Homeland Security Investigations to stop cases of global intellectual property theft.
A U.S. District Court judge in 2016 sentenced a Chinese man to three years in prison for conspiracy to steal trade secrets from DuPont Pioneer and Monsanto. The man illegally obtained varieties of new corn seed samples from a DuPont Pioneer test plot in Iowa. He had gathered more than 1,000 pounds of corn seed to provide to scientists in China to reproduce the genetic traits of the corn.
When considering the value of proprietary information, Zarley asks clients to consider the value in the time it takes to develop the item and how important it is to distinguishing the business from its competition. While anyone could create a customer list, it takes time to accumulate the data for a specific company’s customers, and the company would want to keep that information confidential, he says.
He also recommends the business owner set clear guidelines in writing to both protect the company’s intellectual property by keeping it secret and to ensure employees understand the company has ownership of work regardless of its creator. Employees could be privy to information about an invention or idea that will be patented, so confidentiality provisions are necessary through a contract or in an employee manual that is signed to guarantee company ownership.
A confidentiality agreement is also vital if an employer needs to pursue legal action if a trade secret was stolen, Holman says.
In most cases, any material that could be copyrighted that the employee creates while at work — the “on my dime and my time” idea from the business owner — is owned by the employer or even the client, Zarley says. Even then, things can still get murky if there’s no clear guidelines.
Employees at Performance Marketing sign a non-disclosure agreement to ensure work is kept confidential, and that everyone understands and agrees with the guidelines, Glynn says.
An employee, unless prohibited by an agreement with their employer, could work as an independent contractor or create an idea on their own time and with their own resources separate from the business.
“There are situations if the employee has done it on their own time, they can patent themselves and move forward without the company,” Zarley says.
Employees at Performance Marketing are allowed to perform freelance work, and in some cases, the company will refer smaller projects — it focuses its work on Fortune 500 companies — to design or interactive team employees to perform independently, Glynn says.
Employees make note when they are working on a separate project such as website development and are asked to perform the job outside of their regular work hours. There have been situations — one employee built a mobile gaming application — when employees have created their own idea and Performance Marketing has partnered with them to help move the idea forward, Glynn says.
In most freelance or independent contract cases, the contract will outline the terms of who owns the final product.
“If they go outside the company and work as an independent contractor, the person who creates it owns the copyright unless the contract has the words ‘work for hire,’ ” Zarley says. “That’s the magic language that transfers ownership. If you’re working for me, everything you do I own the copyright.”
Business owners and legal advisers also recommend a company have clear written guidelines as to who owns copyright, trademarks and patents should partners of a company split and go separate ways.
Performance Marketing also had to assist clients in similar situations when they’ve met copyright or ownership issues if a previous partner broke away from the project and owns the website or a piece of software tied to the business, Glynn says. ♦
What are methods to protecting intellectual property?
There are multiple ways to protect intellectual property, but they serve different purposes and vary depending upon the type of property that is being protected, according to the United States Patent and Trademark Office (PTO).
An individual must apply to the PTO to receive any of the following:
Patent: A patent grants the property rights to the inventor. A patent is generally good for 20 years from the date the applicate was filed in the United States. It is only effective within the United States, U.S. territories or within U.S. possessions. Having a patent gives the holder “the right to exclude others from making, using, offering for sale or selling” the invention in the United States or “importing” the invention into the United States. Fees vary depending on the type of patent application and how the invention is claimed. There is a non-refundable filing fee whether the patent is granted, an issue fee and a maintenance fee that is paid three times after the patent is granted to maintain the legal protection. Go to www.uspto.gov to see a list of fees.
Trademark or Servicemark: A trademark is a word, name, symbol or device used to distinguish a good or a business from others. The servicemark is similar but distinguishes and identifies the source of a service rather than the product itself. A trademark can prevent others from creating a confusingly similar mark, but it does not prevent them from making the same goods or selling the same goods and services. There are filing fees associated with trademarks.
Copyright: Copyright protection is provided to the author of “original works of authorship.” This can include literary, dramatic, musical, artistic and other intellectual works that are both published and unpublished. The owner has exclusive rights to reproduce the work, distribute it, perform it or display it publicly. Copyright only protects the form of expression not the subject matter of the writing. The Copyright Office of the Library of Congress registers copyrights. A work does not need to be registered in order to claim copyright; however, registered copyright is recommended to establish a public record of the claim, to prevent possible infringement, and is necessary before any infringement suit can be filed.
Trade Secrets: This type of intellectual property consists of information that could include a formula, pattern, compilation, program, device, method, technique or process that is used in business and gives the business an opportunity to obtain an economic advantage over competitors who do not know or use it. State laws can differ, but most have adopted the Uniform Trade Secrets Act. Violation of trade secrets can result in payments to the owner, other damages, court costs and attorney fees, and in some cases prison sentences. A trade secret does not expire, and protection continues until discovery or loss of the secret. ♦