Startup 1.8.Trademark, Patents, and Copyright

Shoestring Venture: The Startup Bible (1st Edition)Every business owns assets. Some of these assets are financial (cash) and some are real property (a building); however, some of the most valuable assets a company owns are often intangible, such as a brand, an invention, books, or ideas. The laws protect your financial and real assets automatically; to protect intangible assets, you have to actively seek that protection.

There are three types of legal protections for intangible or “intellectual” assets:

  1. Trademarks – A trademark protects the names and symbols of your businesses, your products, and your services. If you’ve built value with your names or symbols, other people may try to “steal” that value by using the same or similar names or symbols. Their goal is to have consumers confuse their name or mark with yours, like selling “Colloway” golf clubs rather than “Callaway” golf clubs. In Afghanistan, for instance, there is a fast-food restaurant called “KFC” for “Kabul Fried Chicken,” complete with Colonel Sanders and the red-and-white logo! A trademark gives you legal recourse to make them stop (but this doesn’t include Afghanistan).Getting a trademark is a long, expensive, and trying process. The U.S. trademark office has to search all its trademarks and symbols and make sure that your trademark does not confuse people with other trademarks. A trademark has two statuses: the trademark has been approved by the U.S. as a legal trademark belonging to you (a “registered” trademark indicated with the symbol circle-R) or a trademark has not been approved, either because it has not been submitted or it is pending approval, but the owner wants to claim it as a trademark (this is indicated with the symbol TM). If you claim a trademark, you should always use the TM symbol. The R symbol is not required for a registered trademark; the registered status is sufficient legal protection.
  2. Patents – A patent protects inventions and some ideas for a certain amount of time. The owner of a patent has exclusive rights to the invention or idea for a certain number of years. According to law, you do not “own” the intellectual property represented by a patent until that patent is actually granted. International relations mean that a patent granted by the U.S. must be respected by other countries, but most patent owners seek international patents to bolster that protection. The United States will allow you to patent a business “idea” in addition to inventions. The patent process is very long and very expensive, but the law affords you certain protections while the patent is pending approval.For the simplest inventions, like a new kind of paper clip, you can expect to spend around $5,000 in government, lawyer, and other fees. More complex inventions cost much more; you can probably expect to pay $10,000 or more.The process itself is painstakingly slow. Because of an enormous backlog of filings, it typically takes a year-and-a-half after you’ve filed for the examiner to even acknowledge your existence. It can then take months or even years after that for the process to wind down to completion.
  3. Copyrights – A copyright gives you ownership of an “expression.” In American law, this covers writing, music, software, and a host of other “expressions.” Like a patent, this gives you several rights that others do not have concerning your intellectual property: the right to sell, the right to copy, the right to perform, etc. You can, of course, license or sell any one of these rights while retaining all the others. For instance, you can sell performance rights while retaining publication rights.In the United States, copyrights are issued by the Library of Congress.Unlike a patent or a trademark, in American law you enjoy full protection of copyright law even though you don’t register your copyright with the U.S. government. You don’t even have to claim copyright, but it’s a good idea to indicate copyright if you think something you have should be copyrighted. Legal registration of your copyright gives you a paper trail to pursue individuals that have violated your copyright.Unlike patents or trademarks, however, copyrights are affected by fairly generous rules regarding “fair use.” For instance, Star Trek is copyrighted, as are all the characters’ names. However, I can write a paragraph in this book about how I enjoyed the show, the episode I enjoyed the most, and even quote a few lines from that episode and not be in violation of Paramount’s copyright. I can mention, criticize, summarize, and provide limited quotes from books, Web sites, films, and anything else that ‘s copyrighted provided I’m following general strictures of fair use. So, unlike a patent, a copyright isn’t “total” protection.


Copyrights, patents, and trademarks are only as good as your ability to litigate them. If anyone violates your intellectual property, it is up to you to go after them, make them stop, and collect damages, if possible. The government isn’t going to do it for you, despite the ominous FBI warnings that introduce every DVD you’ve ever seen. If you secure intangible assets with a patent, trademark, or copyright, you must plan on creating a defensible position and having resources to defend your patent, copyright, or trademark. Large companies will sometimes “steal” patented ideas or copyrighted material with the understanding that they can outspend, outmaneuver, and outlast a smaller, cash-strapped company that happens to own those intellectual assets. So gaining a patent, trademark, or copyright is only the first necessary step in protecting your intellectual assets. Your next step is putting yourself in a strategic and tactical position to successfully defend your assets.

  • U.S. Patent and Trademark Office – The U.S. Patent and Trademark Office provides complete information on all trademark, patent, and copyright issues in the U.S. The site allows you to search trademarks (to see if your business or product name is in violation of trademark), view patent and trademark law, and acquire all the necessary forms.
  • Library of Congress U.S. Copyright Office – All copyright registrations are handled by the Library of Congress. Everything you need in order to register a copyright is available on this site, but to actually obtain a copyright, you have to mail a hard copy, picture, CD, or video of the work, depending on what it is. Fees run around $45 per work registered for a copyright.
  • PIPERS Website – PIPERS is an independent specialist patent attorney firm that provides patent advice and registration to individuals, small businesses, corporations, or law firms. The services include patent registration across several countries.
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