Understanding the distinctions between patents, trademarks, and trade secrets is critical for safeguarding innovations and maximizing commercial potential. Each form of protection serves a unique purpose and offers different avenues for securing rights and growing your business.
Intellectual property (IP) rights grant inventors or businesses exclusive control over their creations, including inventions, technologies, literary and artistic works, designs, symbols, names, and images used in commerce. Once obtained, these rights empower individuals and organizations to govern the use of their creations and prohibit unauthorized usage by others.
While there are several ways to protect your IP, this article focuses on how businesses, including startups, academic institutions, and solo inventors, can use patents, trademarks, and trade secrets to protect their innovations to get the most revenue out of their business.
Patents & Patent Drafting Strategies
Patents are the IP tool that comes to mind for most when they think of or seek out IP protection. Patents grant inventors or businesses exclusive rights to exclude others from making, using, selling/importing the claimed invention into the patent jurisdiction for a limited period, which in most cases is 20 years. There are three primary types of patents: utility patents, design patents, and plant patents. Utility patents cover functional aspects of inventions, design patents protect the appearance of products, and plant patents safeguard new plant varieties.
In the US, a patent application must be submitted to the US Patent and Trademark Office (USPTO) for review and approval. In exchange for the right to exclude others from using the invention, the application must include sufficient detail to describe how to make and use the new creation so that others can replicate it, i.e., the inventor cannot hide the ball.
To create an effective patent application or prosecute a patent, an inventor or business should actively engage in the patent drafting process alongside legal IP counsel. While IP attorneys’ technical backgrounds enable them to guide inventors and businesses accurately through the process, their expertise doesn't replace the inventor's knowledge.
Effective communication between both parties ensures a smoother patent prosecution process, leading to stronger patent assets. As the creator, providing comprehensive information and feedback to the IP attorney ensures accurate representation of the invention and positions the IP attorney to manage subsequent conversations with the USPTO.
Additionally, collaboration helps the IP attorney and inventor or business navigate potential challenges with the USPTO to successfully secure patent protection. Initial patent filings often face one or more rejections, under applicable patent law. Here, an experienced IP attorney, using information shared by the inventor or business, works closely with the USPTO to address concerns, manage the process effectively, and minimize avoidable missteps or stress.
Successful patents can be approved by the USPTO within one year under special expediting programs, with payment of applicable fees. This process can be cumbersome if done without an experienced IP attorney. Once approved, the inventor or business gains exclusive rights to the patent, empowering them to enforce these rights against any infringement.
However, patent protection doesn't grant the right to make and use an invention; rather, it provides the right to exclude others from doing so. This distinction arises because patents can cover improvements and the improvement can require components that might still be within the scope of someone else's unexpired patent, limiting the ability to fully utilize the invention without infringing on others' rights.
Trademarks & Trademark Strategies
Trademarks protect brands and distinguish products or services in the marketplace. Trademarks focus on words/phrases, logos, slogans, symbols, etc. that uniquely identify the source of goods or services. In the U.S., trademarks are filed, reviewed, and approved by the USPTO for registration. Unlike patents, which expire after a period of time, a trademark remains in force as long as the trademark is in use commercially and renewed.
Trademark protection cannot be obtained for words that the public understands to be the common name the product or service. When selecting a trademark, it is important to avoid words that merely describe some aspect the product or service the applicant is offering and opt for coined phrases, to enhance eligibility for trademark protection. This is because trademarks are designed to grant exclusive usage rights over marks, and trademarking descriptive phrases impedes the public’s use of words necessary to describe the products or services at issue.
Coined terms, or newly created phrases, have a higher chance of being accepted, as these are not common terms and often unique. Early consultation with IP attorneys and strategic selection and clearance of words allows for adjustments and increases the likelihood of securing valuable trademark rights, while minimizing the risk of rejection by the USPTO office and/or opposition of registration of the mark. Moreover, seeking early consultation can optimize businesses' branding efforts by confirming the availability of a business, product, or service name for trademarking. This proactive approach prevents unnecessary expenses associated with rebranding efforts.
Once the trademark is granted, the owner gains exclusive rights to the trademarked term in connection with specific goods and/or services.
Trade Secrets & Trade Secret Strategies
Trade secrets include confidential information critical to a business' competitive advantage, such as formulas, processes, or proprietary data. Examples of trade secrets include KFC’s chicken recipe, IBM’s manufacturing processes, and Chase Bank’s user data.
Unlike patents or trademarks, trade secrets rely on secrecy rather than registration. This offers perpetual protection, rather than a limited period like patents, as long as confidentiality is maintained. However, trade secrets must be actively protected through internal policies and agreements. A trade secret can be protected indefinitely as long as the secret is commercially valuable, its value derives from the fact that it is secret, and the owner takes reasonable precautions to maintain its secrecy.
Trade secrets and patents have diametrically opposed requirements. In order to be granted a patent, you must disclose the process, components, or design to the USPTO, and this information is eventually shared, when the application is published or allowed i.e., disclosure is a requirement for patent protection. By contrast, secrecy governs trade secrets.
For businesses, leveraging trade secrets can be a powerful strategy, particularly for startups and research institutions. Maintaining trade secret status enables companies to safeguard valuable innovations for minimal expenses.
IP Commercialization Strategies
The ultimate goal of all IP protection is not only to secure rights, but also to capitalize on innovations through commercialization. Licensing, technology transfer, and cross-licensing arrangements enable inventors and businesses to monetize their IP assets effectively. Licensing agreements can grant third parties the right to use patented inventions or trademarks in exchange for royalties. This provides revenue streams without direct involvement in manufacturing or distribution.
Cross-licensing agreements enable parties to exchange IP rights, enabling mutual access to valuable technologies and facilitating innovation in collaborative ventures.
For patent holders, maximizing the exclusivity period is crucial to safeguarding the new product's market dominance before its replication becomes allowable.
Partnering for Long-term IP Success
Collaboration with knowledgeable IP attorneys is indispensable when determining the best path to protect a new creation. IP attorneys guide clients through the process of IP protection, from initial filings to approval/allowance and commercialization strategies. Open communication, mutual trust, and proactive engagement with IP attorneys help inventors and businesses realize the full potential of their intellectual property, while safeguarding against potential risks and maximizing commercial opportunities.
In conclusion, patents, trademarks, and trade secrets offer distinct avenues for protecting and commercializing innovations. By understanding the nuances of each form of protection and working in strategic collaboration with IP legal counsel, inventors and businesses can confidently understand their IP options, unlocking new opportunities for growth and innovation.
Questions about which IP strategy is right for you or your business? Pabst Patent Group specializes in intellectual property law in the biotech, pharmaceutical, and chemical industries. Our lawyers leverage their deep scientific, legal, and business expertise to create effective IP strategies to create real impact.
