Wilson Sonsini - ECP

FAQs

IP

  • IP 101
  • Patents
  • Trademark
  • Copyright
  • Licensing
  • Trade Secrets
  • Open Source
  • Privacy
What are the basic differences between the four main types of IP rights?

Intellectual Property Right Description of the Protected Technology Examples Owner's Rights Obtaining Protection Length of Protection (in U.S.) Cost to Obtain Protection
Copyright

Protects original works in a tangible medium that shows some creative expression. 

Does not protect ideas, themes, titles, short phrases, brand names, facts, lists of ingredients, or contents

Software, books, music, video, and web pages Right to stop others from copying, distributing, or creating derivatives of the work

Copyright protection exists the instant the work is "fixed in a tangible medium"

Registration is a prerequisite to enforcement, but not to the existence of your rights

Life of the author plus 70 years (but for "works made for hire, "95 years from the date of first publication or 120 years from its creation) Minimal
Trade Secret Right

Protects non-public information (including ideas) that derives economic value from not being generally known

Does not protect information that is readily observable, or against independent invention or development by others

Secret chemical formula or manufacturing technique

Source code

Right to stop "misappropriation" of the trade secret, but only against those who accessed it - not strangers who independently develop the same information  No formal requirements to obtain trade secret protection, but you must take reasonable steps to keep the information secret (e.g., disclosure of the information only under NDAs, using security systems for source code) No time limit - as long as the information remains secret and the possessor of the information continues to derive economic value from the information Minimal
Patent Rights

Protects a "process, machine, manufacture, or composition of matter" that is novel, non-obvious, and useful, and that has been reduced to practice

May also  protect the physical appearance or ornamental design of a product (design patent)

Does not protect natural occurrences, scientific principles, formulas with no utility, or business forms

Pharmaceutical formulations, algorithms, and methods

Right to stop others from making, selling, using, and importing the patent invention

Protection exists only in the country or countries where the patent was granted

Application and registration are required for protection; applications are publicly disclosed after 18 months

Protection is available for the inventor who is first to file

For eligibility for U.S. protection, must file an application within one year of [invention, or first sale, or publication] the invention

For eligibility in most other countries, "absolute novelty" is required - the invention may not have been publicly used, sold, or published anywhere in the world before filing

Expensive
Trademark Right

Protects names, symbols, designs, and other identifiers (such as sounds, scents, and colors) used to distinguish one source of goods from another 

Does not necessarily protect against the use of the same name by others if the name is used in a different territory, or to identify different products or services

Coca-Cola and the shape of the Coke bottle

Right to prevent the use of the same or confusingly similar marks

Protection for registered trademarks exist only in the country or countries where the trademark is registered

Ownership established through use in commerce

Registration is helpful for enforcement, but not required

No time limit - as long as the mark is being used in commerce as a source identifier Moderately Expensive

How do I protect my idea?

The best way to protect your idea is to file patent protection covering that idea before disclosing your idea to another person. However, if you must disclose your idea before filing for patent protection, do so under the protection of a non-disclosure agreement (NDA) obligating the other party not to disclose your idea to others. This is important because in some jurisdictions, publicly disclosing your idea can foreclose your right to patent protection.

How do copyrights, trademarks, and patents differ?

Copyrights, trademarks, and patents protect different intellectual property.

  • Copyright protects any original work of authorship. This includes literary, dramatic, musical, and artistic works, such as movies, songs, novels, computer software, and architectural works. Copyright does not protect ideas, names, or short phrases.
  • Trademark law protects the names, words, logos, symbols, and even, in some cases, sounds or colors used on products and in connection with services. Trademarks serve to indicate the source of the products or services and to distinguish them from others.
  • Patents, in contrast, protect inventions. Patents can be granted for ideas that result in inventions which are novel, useful, and non-obvious.

Copyright, trademark, and patent protection may cover different aspects of the same product. For example, software can be protected by both patents and copyrights. Another example is a logo for a brand. The logo, which indicates that it is from a particular source, may be protected as a trademark, and at the same time, the creative and artistic aspects of the logo may be protected by copyright.

Copyrights, trademarks, and patents last for differing periods of time in the U.S.

  • The duration of copyright protection depends on several factors. For works created after January 1, 1978, by an individual author, protection lasts for the life of the author, plus 70 years. For works created anonymously, pseudonymously, and for hire, protection lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter.
  • A utility patent that was issued after June 8, 1985, will generally expire after 20 years, and a design patent will generally expire after 14 years.
  • Trademark protection, in contrast, can last as long as the trademark is used in commerce.
    In addition, the processes for securing copyrights, trademarks, and patents in the U.S differ.
  • A work has copyright protection the moment it is created and fixed in a tangible medium. Registration of a copyright is voluntary, but registration is often recommended and is necessary to file suit against infringers. Early copyright registration enables claims for statutory damages and attorney’s fees, both powerful tools in policing against infringement.
  • Trademark registrations are not required in the U.S., but they provide certain advantages, including the ability to enforce anywhere in the U.S., and, at times, an ability to secure “constructive” rights that predate your actual use of the mark. Outside the U.S., trademark registrations typically are necessary in order to ensure freedom to operate and to maintain enforceable trademark rights.
  • Inventions in the U.S. are not protected by patent law unless the U.S. Patent and Trademark Office (USPTO) has issued a patent for the invention.

Can my startup idea be a spinoff of a popular company?

TLDR: Keep in mind the various protections the popular company may have on its IP and also review any agreements with the company.

When considering whether an idea for a start-up can be a spinoff of a popular company, legally, you should keep in mind that particular company’s rights to its intellectual property and any existing contracts between you, the company, and/or its affiliates.

With respect to the company’s IP, you can broadly think about patent (e.g., utility and design), copyright (e.g., original works of authorship, including code), trademark (e.g., logos or slogans), and trade secret (e.g., customer lists) as the main sources of IP. While this doesn’t capture everything in the IP world (for example, there could be possible non-public company information), it’s a good place to start thinking about areas you should avoid in terms of your product, marketing, or other business activities.

In addition to company IP, you should consider existing contracts with the company and its affiliates. If you don’t work for the company, you should check whether you have agreed to any terms of service with the company or consider whether you may enter into future agreements with that company, its suppliers, and its customers, among other affiliates. It is possible to be liable for a “tortious interference with a third party contract,” so you should be sensitive of any existing company agreements and relationships when launching your business.

If you are employed at the company, you should be extra careful to consult an attorney regarding any existing confidentiality, non-competition, or non-solicitation agreements, as well as any other circumstances (e.g., using company time or property to build your spinoff will likely give the company a claim to whatever you have built). This scenario can create the most significant hurdles in launching such a spinoff project.

Who owns the IP: Founders? Former employers?

TLDR: The Company should own the IP.

All IP related to the business of the company, whether created by employees or consultants, or previously owned by founders before the company was created, should be assigned to the company. Investors will want to see that a clear chain of IP ownership has been established so that they know that no founders or other service providers can later claim that the company did not own the underlying IP. If the IP was created while working for a former employer, and was within the scope of the employment, the IP would need to be licensed to the new company.

Who owns the intellectual property created?

Generally, any development or improvements of an invention made within the scope of your employment or made using equipment provided by a university or company may be owned by the university or company.

Who pays for protecting the intellectual property?

Generally, the university or company assumes the burden of protecting and commercializing the invention.

Is patenting and publishing mutually exclusive?

No. One can both publish disclosures related to an invention and patent the underlying invention. To avoid public disclosures that may prevent a patent from being granted, file a patent application on the invention prior to publishing data relating to the invention.

How does a copyright protect me?

Copyright protects original works of authorship, including literary, dramatic, musical, and artistic works, such as photographs, books, movies, songs, and software. Copyright protection can also extend to some online content, including websites, social media and online postings, graphics, and logos.

The Copyright Act generally gives the owner of a copyright the exclusive right to:

  • make copies;
  • prepare adaptations;
  • distribute copies of the work ; and
  • perform or display the work publicly.

The owner of a copyright, once registered, may sue potential infringers. Remedies available include: (1) a court order barring the infringer from continuing the infringing activity; (2) confiscation and destruction of the infringing items; (3) the payment to the copyright owner of any profits that the infringer received and of any losses suffered by the copyright owner; and (4) in some cases, statutory damages as an alternative to actual profits and losses, and attorneys’ fees.

Copyright law also provides practical tools to help rights owners stop third-party infringers, particularly online. For example, most online platforms take advantage of the Digital Millennium Copyright Act (DMCA), which enables a copyright owner to submit a so-called takedown notice identifying infringing user-posted content, triggering removal of the content. Owners of registered copyrights can also record the works with U.S. Customs and Border Protection (CBP), enlisting CBP to help stop pirated products from entering the U.S.

My startup has limited resources and protecting IP can cost money. How do I know what kinds of IP protection to spend our money on this early in the companys lifecycle?

Each company’s IP strategy should be unique to that company, including its goals, resources, and industry. In many cases, it is not the right strategy to file for all types of IP protection early in a company’s lifecycle—your IP attorney can help you prioritize.

Is a domain name the same as a trademark?

No. While you can have trademark rights in a domain name, the two are distinct, and neither automatically implies the other.

A domain name is an internet address that can be used to access a particular website. In contrast, a trademark is a word, phrase, symbol, or design that serves to identify and distinguish the source of particular goods and services. A domain name can be registered if it’s not identical to a previously registered domain name; however, registration of a domain name does guarantee the registrant’s ability to use the domain for any purpose.

 Simply registering a domain name, without more, does not confer trademark rights. A company may register or acquire an available domain name, for instance, only to find itself liable for trademark infringement, trademark dilution, and/or cybersquatting claims brought by another party. It is, therefore, imperative to assess the potential risks of a name before adopting it as a domain name, and to do so in combination with taking steps to protect the name itself under trademark law.

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