Entrepreneur Toolkit: What is Intellectual Property (IP)?
What is Intellectual Property?
The term "intellectual property" (commonly shortened to "IP") refers to creations of the mind, and can refer to a variety of creations, such as inventions, literary and artistic works, designs, commercially valuable secrets, and designations used to identify a source of goods or services. Various laws provide protection for IP so that creators of the IP can benefit from their creations. Governments seek to strike a balance between the public interest and the interests of IP creators in determining the protections offered to IP. Most IP is territorial; obtaining protection in the U.S. does not provide protection in Europe or elsewhere. Innovators and entrepreneurs should understand what IP they have and how that IP can best be protected. They should also understand what IP others may have that may impact their business.
Types of IP
Intellectual property can be classified according to the type(s) of protection available to the particular creations of the mind. In some cases, multiple types of IP protection can be applied to the same creations. Many products or services can also be protected by different types of IP protection, either alternatively or simultaneously. Entrepreneurs and innovators should consider what types of IP protections could be applied to their intellectual property, and should plan how best to protect their intellectual property within their changing budgets.
Most people thinking about IP consider four main types of protection, but there are also several less-known types of protection available for IP, depending in part on the geographic location.
When innovators and entrepreneurs consider IP, they often think about patents. A common question posed to guests on ABC's Shark Tank is whether the product is covered by any patents, and viewers can immediately tell the Sharks take things more seriously when the guests are ready to discuss their patent plan. Patents are a government grant of an exclusive right (a "legal monopoly") for an invention, for a limited period of time. A patent owner has the right to determine whether and how others are allowed to use the invention in the country covered by the patent. The two most-common types of patents are "utility" patents (protecting innovative function) and "design" patents (protecting non-functional ornamental design). "Provisional" patent applications never mature into an enforceable patent on their own, but can hold your place in line for one year at low cost. Beware: patent rights are easily lost - if your invention is offered for sale, sold, or publicly disclosed (e.g., published) at any time before filing a proper application, even by yourself, patent protection is unavailable (with limited exceptions).
Every business has or will have trademarks and/or service marks (technically, "trademarks" refer to "signs" (names, words, logos, animations, sounds, jingles, colors, smells, shapes, etc.) used to identify the source of "goods" (products) while "service marks" refer to signs used to identify the source of "services," but "trademarks" can be used to refer to both). Because trademarks help consumers know with whom they are dealing, state law and federal law allow trademark owners to prevent others from using confusingly similar marks. The scope of protection varies, however, depending on the "distinctiveness" (uniqueness) of each mark. In the U.S., trademark protection requires actual use of the mark before any enforcement can occur. In many other countries, you can obtain a registration without use, but others can challenge it by showing no actual use. Unlike patents, trademark rights do not have to be officially granted to be enforced, but federal and/or state registration provides some benefits.
There is certain information that each business uses to succeed. Any information that has value to your business in not being generally known is what is referred to as a "trade secret." Trade secrets can include a broad variety of information, including customer lists, pricing considerations, business contacts (e.g., manufacturer and distributor information), business plans, marketing strategies, financial status, methods of operation, methods of manufacture, chemical formulae, software source code and object code, etc. This information's value would be greatly reduced if freely obtained by your competitors. As such, businesses must use reasonable measures to protect the secrecy of their information, including adequate digital security, confidentiality/nondisclosure agreements, careful employee agreements, and the like.
From your website to your product instructions, your business will likely strive to put out unique and engaging content for your customers. Maybe your business produces or uses a computer program or app. Copyright protections allow "authors" to protect the creative expression embodied in the works they create. Copyright does not protect facts, ideas, methods of operation, mathematical concepts, and the like. Looking to outsource creation of your website or app? Since the author owns the copyright by default, be careful to make sure your agreements include an assignment of the copyright to your business or otherwise handle copyright ownership in a way you are happy with.
- Trade Dress - related to trademarks: protects the look and feel of your product, service, or product packaging
- Plant Patents - U.S. protection for asexually propagated cultivars other than tubers
- Plant Variety Certificate - U.S. protection for sexually reproduced and tuber-propagated plants
- Utility Model - provided in some countries (outside the U.S.), like patents for minor inventions or improvements of existing products, but generally shorter term, less or no examination, and fewer formality requirements
- Industrial Design - roughly equivalent to design patents - protects ornamental or aesthetic aspects of 2D or 3D features of a product (see WIPO publication in Additional Resources below)
- Mask Work/Integrated Circuit Layout Design - allows protection for semiconductor chip product designs not purely dictated or constrained by their function
- Moral Rights - protects the reputation and personal value of a work to its creator - rights of attribution and integrity of work
- Publicity Rights/Personality Rights - rights to one's own image and likeness and right to privacy
Additional Resources
- U.S.P.T.O. IP Identifier - Answer some basic questions to learn what main types of IP you have
- WIPO About IP - Summaries of different IP types discussed above
- Wikipedia IP - Includes discussions of major and minor IP types
- USDA Plant Variety Protection Office - Describes types of protections for plants in the U.S.
- WIPO Publication - Looking Good: An Introduction to Industrial Designs - information for small and medium-sized businesses