Intellectual property (IP) is commonly thought to confront technical matters that require a certain amount of scientific or engineering background in order to wrap one's head around them. In actuality, IP is a diverse ecosystem of intangible property rights that offer extreme value.

Virtually all businesses have some type of IP at play, but they may fail to recognize it if they have a misunderstanding of what IP exactly is. Furthermore, they may fail to take the steps necessary to protect their IP simply because they're not sure how.

This article seeks to somewhat demystify IP and provide business practitioners with some need-to-know information that will help you identify when IP is at play and what you can do to secure and maintain protection for your business clients.

Patents

Patents exist as a "quid pro quo," where inventors are given the right to exclude others from practicing their inventions for a period of time once they disclose to the public how to make and use the invention. Under this system, individuals are incentivized to innovate while society benefits from the additional knowledge.

Patents are a creature of federal law and applications are prosecuted through the U.S. Patent and Trademark Office (PTO). The U.S. patent system is "first-to-file" which means, generally, that whoever makes it first to the PTO can stake their claim to the invention.

Patents offer protection to new inventions, not ideas. Therefore, laws of nature, natural phenomena, and abstract ideas are not patentable.

There are three types of patents, with utility patents being the most common:

• Utility patents are granted to those who invent a new or useful process, machine, article of manufacture or composition of matter, or any new or useful improvements thereof. A famous example is Thomas Edison's lightbulb.

• Design patents are granted to those who invent a new and original ornamental design for an article of manufacture. An example is the Statute of Liberty.

• Plant patents are granted to those who invent or discover and asexually reproduce a distinct and new variety of plant. One of the better-known examples is the Honeycrisp apple tree.

Each type of patent has a different term. Utility and plant patents expire 20 years after the filing date of the earliest nonprovisional (i.e., formal and complete) application. Design patents expire 15 years from the date of issuance.

For an invention to be considered novel, it cannot be included in "prior art." Prior art consists of references and documents in existence prior to when the application is filed, such as academic or newspaper articles. Making an invention available to the public or for sale also places makes it prior art. A patent can even become prior art against itself if the inventor discloses the patent-eligible subject matter and fails to file within one year of such disclosure.

Pursuant to the quid-pro-quo structure of the patent system, patentees can pursue causes of action for infringement against those practicing an invention prior to expiration of the patent term. Remedies include injunctive relief, monetary damages, and in exceptional cases, attorneys’ fees and enhanced damages.

Trade Secrets

Trade secrets are a creature of state law, though a federal forum is available under the Defend Trade Secrets Act. There is no administrative process for securing trade secret rights.

Under the Wisconsin law, a trade secret is defined as information that derives economic value from not being generally known or readily ascertainable by proper means and is the subject of efforts to keep it a secret.

"Information" is defined as including a formula, pattern, compilation, program, device, method, technique, or process. A perfect example is the Coca-Cola Co.'s world-famous beverage recipe, which has remained behind closed doors for years.

Trade secret misappropriation occurs under Wisconsin law when a person:

• acquires such trade secret by improper means; or

• discloses or uses such trade secret without consent if they used improper means to acquire it or knew (or had reason to know) that it was acquired from another by using improper means, under circumstances that gave rise to a duty to maintain its secrecy, from or through a person who owed a duty to maintain its secrecy, or by mistake or accident.

If misappropriation occurs, a trade secret owner may be entitled to an injunction, reasonable royalties, or monetary damages. While injunctions are typically preferred in an attempt to maintain secrecy, misappropriation can be detrimental. Once the information is disclosed, it cannot be removed from the public mind. For this reason, trade secret owners must undergo efforts to maintain secrecy. The following practices are generally advisable:

• store the trade secret in a locked space that is not generally accessible;

• limit the number of people who have access to the trade secret or to any one part of it;

• clearly mark the trade secret as such;

• ensure that employees are aware that the information is considered by the business to be a trade secret; and

• enter into nondisclosure agreements with key employees and outside contractors with access to the trade secret.

Taking additional steps to secure the confidentiality of a trade secret can make a great difference in protecting an essential business asset.

Copyrights

The requirements for establishing a copyright are relatively simple: protection is afforded to original works of authorship that have been fixed in a tangible form of expression.

Originality requires that the author did not copy the work and that a minimum degree of creativity can be shown. Registration is not required to gain protection, but is required to bring suit against alleged infringers.

Section 102 of the Copyright Act sets forth a list of works of authorship, including literary, musical, dramatic, and pictorial works; sound recordings; and more. Section 106 explicitly grants copyright owners with the exclusive right to, among other things, reproduce the work in copies, prepare derivative works, distribute copies to the public, or perform the work publicly. Infringement occurs when one such right has been infringed upon, either directly or indirectly.

However, under the fair use doctrine, alleged infringers can argue that their use, which would otherwise be infringing, is "fair" under the law, protecting them from infringement liability. The use of copyrighted works for criticism, comment, news reporting, teaching, scholarship, and research are more likely to be found as fair. In making this assessment, courts consider multiple factors to strike a balance between incentivizing copyright owners and allowing public access to creative materials.

From a business perspective, there are unique rules that apply to different industries. For example, the music industry deals with the right of reproduction and the public performance right, implicating additional licenses. In addition, 17 U.S.C. Section 512, known as the Digital Millennium Copyright Act, grants statutory immunity from copyright infringement to internet service providers under certain conditions. Practitioners in these industries must familiarize themselves with different subsets of copyright law.

Trademarks

Trademark rights arise out of use in commerce, not registration. Owners can pursue federal registration through the PTO, which offers additional rights, including nationwide priority (except for geographically limited common law rights) and inclusion in a national database.

Trademarks are best thought of as source identifiers that allow consumers to connect goods and services with their providers. Business names and logos are most common, although other types of source identifiers can be protected as well. For example, the smell of Play-Doh^® has been trademarked, as well as the buzz of a lightsaber from the Star Wars^® films.

A key consideration in trademark law is whether its use is likely to cause consumer confusion given what already exists in the marketplace. Many factors, such as the strength of the mark and its similarity to other marks are considered. Marks that are confusingly similar to marks already in existence, within certain parameters, may be considered infringing.

Trademark strength falls on a spectrum of distinctiveness, with marks that merely describe the product being the weakest; marks with no association with the product, known as "arbitrary," being stronger; and "fanciful" marks being the strongest. For example, Apple^® is an arbitrary mark because the word "apple" had no association with computers prior to the introduction of the Apple line of electronic products.

Below are some simple steps business practitioners can take to ensure that their trademark rights are properly protected:

• avoid selecting a business or product name that is used by another business offering similar goods and services to avoid accusations of infringement;
• use the ™ symbol, or the ® symbol, if the trademark is federally registered, to notify the public of the rights being claimed; and
• identify any third-party use of a registered or otherwise claimed trademark that may cause confusion and consider sending a cease-and-desist letter if necessary.

Being aware of how to properly use trademarks in the day-to-day operations of a business can help develop and maintain any available rights and protections.

Conclusion: The Backbone of a Business

This article provides a very brief summary of many complex topics and cannot begin to breach the greater intricacies of IP law.

However, intricacy does not undermine importance, and IP rights should not be viewed as secondary considerations. These assets are often the backbone of a business, serving as the invention that started up a tech giant, a recipe that spurred a restaurant chain, or a clever name that keeps a company top of mind.

Maintaining a general knowledge of IP law will help business practitioners protect such indispensable assets.

This article was originally published on the State Bar of Wisconsin’s Business Law Blog. Visit the State Bar sections or the Business Law Section webpages to learn more about the benefits of section membership.