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The Power of Exclusivity: Protecting the investment of innovation.

There are three general areas of IP: patents, copyrights, and trademarks. It’s important to understand that each type of IP protects different aspects of an innovation and functions within a different legal framework. However, each legal framework has the common goal of protecting the IP owner and the substantial investment in the innovation. Fundamentally, each form of IP provides a legal right that enables the asset’s owner to sue someone who uses their property without permission. This unauthorized use of a patent, trademark or copyright material is called “infringement.” This allows companies to protect the fruit of their labor and continue to invest in innovation. If there is sufficient demand for their ingenuity, companies are able to charge others for the privilege of using it.

A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. In principle, the patent owner has the exclusive right to prevent others from commercially exploiting the patented invention. In other words, patent protection means that the invention cannot be commercially made, used, distributed, imported or sold by others without consent from the patent owner. In exchange for receiving a patent, technical information about the invention must be disclosed to the public in a patent application. The patent has a limited term, allowing the owner to exclude competitors for that period of time. Additionally, the patent owner can license the patent for others to use it, or sell it, as with any asset. This can provide an important source of revenue for a business. Indeed, some businesses exist solely to collect the royalties from a patent they have licensed - perhaps in combination with a registered design and trademark.

A trademark is a word, phrase, symbol, and/or design that serves to identify and distinguish the source of a good or service offered by one party from those of another. A primary purpose of trademark law is to prevent unfair competition through the protection of consumers by prohibiting companies from using trademarks substantially similar to those of other companies that may have more brand equity and customer loyalty. Trademark law protects a company's investment in their products and services intended to grow brand recognition and loyalty. For example, if a new beverage company entering the soda market, that company would need to invest time and money into gaining market share. The new beverage company would not be able to take a short cut and use the trademark "Coca-Cola" on its products to unlawfully gain customers.

Copyright law originated with the protection of artistic works (ex. novels and paintings) and has since expanded to any original work of authorship that is independently created by a human author and possesses having at least some minimal degree of creativity. Similar to patents, copyright law has a robust bundle of exclusionary rights codified in 17 U.S. Code § 106 - Exclusive rights in copyrighted works. This statute generally states:

The owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public; (4) in certain cases … to perform the copyrighted work publicly; (5) in certain cases … to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

Unlike a patent, copyright and trademarks do not require registration or an application approval prior to the existence of legal rights. A copyright exists on a work that falls within the predefined and protected category of original works of authorship that are fixed in a tangible form of expression. If another performs an action that violates one of these exclusive rights without permission, the owner can sue that person or entity in federal court for copyright infringement. Although, copyright registration is not necessary for copyright protection to attach to a work, there are many benefits that accompany a federal registration. For example, the registration creates a public record of your copyright claim in your work, the ability to file suit to enforce copyright in federal court, evidence that your copyright is valid, statutory damages and attorney's fees.

Common law rights in a trademark may arise based solely on use of the mark in commerce, without a registration. However, federal registration of a trademark with the USPTO has many advantages, including a notice to the public of the registrant's claim of ownership of the mark, a legal presumption of ownership nationwide, and the exclusive right to use the mark on or in connection with the goods or services set forth in the registration.

There are several ways to protect your investment in innovation and branding. First, consider what makes your products or services unique. Then you can begin to discern which path of protection may be right for your business.


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