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Insider Louisville
February 13, 2017

You have undoubtedly been exposed to intellectual property in the news recently – Apple v. Samsung, perhaps? But what exactly is intellectual property? Intellectual property rights represent the balance between making ideas available to the public at large for public good and protecting the interests of a creator or inventor. The term “intellectual property” is used to describe a variety of property rights in intangible concepts, including patents, trademarks, and copyrights, each of which is discussed further below.

Patents

Contrary to popular belief, a patent itself does not provide any affirmative rights; rather, a patent provides its owner with a series of negative rights. For example, a patent owner has the exclusive right to prevent someone else from making, using, importing, or selling his or her patented invention for a defined period of time, essentially creating a limited monopoly. In exchange for this limited monopoly, an inventor must make the details of the patented invention available to the public, and demonstrate to the U.S. Patent Office that the invention is novel and not obvious.

The U.S. Patent Office grants three types of patents: 1) utility patents, which are available for products, processes, and methods of manufacturing; 2) design patents, which are available for ornamental appearances of products; and, 3) plant patents, which are available for invented or discovered new and distinct varieties of asexually reproducing plants.

Trademarks

Trademarks are words, names, symbols, or combination of those that are used to distinguish the goods or services of one seller from the goods or services of another. In other words, trademarks are used so that a consumer may determine the source of the goods or services. You are likely familiar with trademarks in your everyday life – “Starbucks” for coffee or “Apple” for computers.

Registration of a trademark with the U.S. Trademark Office requires that the mark desired be available for use. The U.S. Trademark Office generally grants registration to the first commercial user of a mark; however, the U.S. Trademark Office does allow for filing an application to establish priority over other marks before it is formally adopted and in use.

Copyrights

Copyright provides protection to “original works of authorship,” including literary, dramatic, musical, artistic, and other creative works. Computer programs (i.e. source code) are also eligible for copyright protection. You are also likely familiar with copyrights in your everyday life – the novels you read, the movies you see, the songs you listen to are likely all copyrighted works.

A common law copyright in an original work of authorship is automatic when that work is “fixed,” or stored in a medium where it can be perceived, reproduced, or otherwise communicated. For example, singing an original song does not itself create copyright rights because it is not fixed; however, a recording of the performance of the original song does, because the work is “fixed” in the recording. While the common law copyright may be automatic, registration of copyright with the U.S. Copyright Office provides valuable benefits to the copyright owner, including additional remedies if the copyright is infringed.

Why should you care?

Every business has some type of intellectual property – the name and logo, the website domain, the products made or sold and the methods used in doing so, informational publications, etc.

There are numerous reasons a business should care about intellectual property. First, intellectual property is an asset of the business – an asset with value that should be maintained and protected. According to a 2014 Forbes article, intangible assets (e.g. intellectual property) are 80% of the average business’ value.

Second, understanding a business’ intellectual property and how it relates to the business’ value places business owners in a better position to leverage that value for the benefit of the business, for example through licensing. Furthermore, understanding a business’ intellectual property makes a business less likely to forfeit its intellectual property rights, for example, by failing to establish priority for a patent or trademark.

Third, without basic knowledge regarding intellectual property, a business may unknowingly and unintentionally be infringing on the intellectual property rights of another, exposing the business to potentially costly liability.

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