Patents and Trademarks

Trademarks and patents, along with copyrights, constitute the major forms of legal protection for what is commonly referred to as intellectual property. Although the rights in these three kinds of intellectual property protection are somewhat similar, trademarks, patents, and copyrights differ in what they protect. Patents protect inventions,

while trademarks protect words, phrases, symbols, and designs. Copyrights protect original artistic, musical, and literary works, including software.

PATENTS

A patent is a grant of a property right by the United States government, through the Patent and Trademark Office, to the inventor of an invention. The term of this property right is twenty years from the date the patent is granted, as long as the holder of the patent pays maintenance fees. A patent is not a grant of a right to make, manufacture, use, or sell the invention; rather it secures the right to exclude others from making, manufacturing, using, or selling the invention for the duration of the patent.

A patented invention is no guarantee of future commercial success. Statistically, although millions of patents have been granted, the number of successful inventions is minuscule. One avenue of commercialization open to a patentee is licensing his or her patent to a company, or a number of companies, provided he or she is able to locate a firm that is willing to risk investing in a wholly untried product or process. Upon licensing the patent, however, the patent holder cannot demand that royalties from the product continue beyond the stipulated 20-year patent period, nor can the patentee set the product's price or determine its use.

CREATION OF PATENT RIGHTS

The power to grant rights in patents arises from Article I, section 8 of the United States Constitution, which provides that “Congress shall have power…to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” The first patent law was passed in 1790, and the current law governing patents was enacted in 1952 and became effective January 1, 1953. Since the first statute, millions of patents have been granted. The current statute sets forth the subject matters for which patents may be granted and the conditions under which a patent will be issued. It also established the Patent and Trademark Office.

Under the law, anyone who “invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvements thereof, may obtain a patent.” Courts have interpreted this language to include nearly anything that could be fabricated, although they have not allowed printed matter, such as books to be patented. An invention must meet the test of being new under the standards in the law before a patent will be granted. The subject matter of an invention must be sufficiently different from what has been described in a printed publication of some sort anywhere in the world, or sold in this country, before the date of the application for the patent. In addition, the invention must go beyond what would seem a common-sense or obvious advancement, even to a practitioner or expert in the field. Finally, an invention must be determined “useful” before a patent will issue; this requirement, however, is interpreted very broadly.

Only the inventor may apply for a patent, with two exceptions: (1) if the inventor has died before applying for a patent, the inventor's estate may do so, and (2) if the inventor is insane, the inventor's guardian may apply for the patent.

An inventor applies for a patent by sending to the Commissioner of Patents and Trademarks, at the Patent and Trademark Office, a written specification, which is a description of the invention and of the process in which the invention is made and used. The specification must contain one or more claims about the subject matter that the applicant believes constitute an invention. The specification must be accompanied by a sworn oath or declaration by the inventor that he or she is the original and first inventor of the subject matter of the application. The application must also include drawings, where necessary, and the appropriate filing fee, which the patent statute and rules have established.

THE PATENT AND TRADEMARK OFFICE

The Patent and Trademark Office carries out the patent laws by examining the applications to determine if the inventor is entitled to a patent. The office publishes the specifications and drawings of all patents on the day they are issued. It records assignments of any patents to entities other than the inventors. It maintains a search room for the public to look at issued patents and the office's records.

TRADEMARKS

A trademark is a word, name, phrase, symbol, or design, or a combination of these elements, that identifies and distinguishes the source of goods or services. The term also encompasses service marks. Service marks are the same as trademarks except that they identify and distinguish the source of a service rather than a product. Trademark rights are used to prevent others from making, promoting, or selling goods or services which have a name, symbol, or design that is confusingly similar to that of the trademark. It does not, however, prevent others from making or selling the same goods or services, as long as it is under a different, nonconfusing mark.

CREATION OF TRADEMARK RIGHTS

There are two distinct types of rights in a trademark or service mark: the right to use the mark and the right to register the mark. These rights arise either from using the mark in actual commerce or from filing an application for registration of the mark with the Patent and Trademark Office.

The registration of marks is controlled under the Trademark Act of 1946; the Trademark Rules, 37 C.F.R. Part 2; and the Trademark Manual of Examining Procedure. The act covers not only trademarks and service marks, but also certification marks, collective trademarks, and collective membership marks.

The first party who either uses a mark in the course of commerce or business or files an application for registration with the Patent and Trademark Office usually has the right to register that mark. A party can use a mark, or establish rights in it, without filing an application for registration. The registration, however, creates a presumption that the party who has registered the mark is the owner of the mark for the goods and services set forth in the registration application, and therefore has the right to use the mark anywhere in the country. This presumption can become important when two parties unintentionally begin using similar marks and become involved in a lawsuit over who has the sole right to use the mark. The Patent and Trademark Office does not determine this, rather it is the decision of a court, which has the power to issue an injunction to stop a party from using a mark and to award damages for a party's improper use of another's mark.

Similarly, the owner of a mark may use the trademark (™) or service mark (^SM) designation with the mark to make it clear that the owner is claiming rights in the product or service so designated. The ™ and ^SM designation may be used without the owner having registered the mark with the Patent and Trademark Office. If it is registered, however, the owner may use the registration symbol (®) with the mark.

Rights embodied in a trademark, unlike those of a copyright or a patent, can last for an indefinite period if the owner of the mark continuously uses the mark for its products or services. Federal registrations last for ten years, but between the fifth and sixth year after the date of the initial registration, the person who registered the mark must file an affidavit with information about the mark and ownership. If the registrant does not file this affidavit, the registration is cancelled. After the initial registration period, the mark can be renewed for successive ten-year terms. Registration of a mark with the Patent and Trademark Office provides protection from others using the mark in the United States and its territories, but does not extend to its use in other countries.

PATENTS AND TRADEMARKS IN THE INTERNET AGE

The growth of Internet technology has affected patent and trademark protection in a number of different ways. For instance, the Internet has made it significantly easier for individuals and companies to conduct searches of patent and trademark databases, whether they are looking to patent an invention or license someone else's invention. The global reach of the Internet has also spurred efforts to harmonize international patent and trademark protection, which may eventually offer firms greater protection in worldwide markets.

In other ways, however, the Internet has made it more difficult for owners to protect their intellectual property rights. The widespread availability of intellectual property in digital form has led to illegal copying of technology, software, music, and other protected materials. Nowhere has this been more prevalent than in the music and newspaper businesses, where the old business models have been turned upside down, and new questions concerning the “fair use” of intellectual property arise continually. Indeed, some of the Internet's most popular sites (such as You-Tube) seem to thrive on offering copyrighted material.

In the early twenty-first century, a growing number of technology companies began launching intellectual property licensing programs to turn their accumulated patent bases into revenue. These firms conducted inventories of their patents and identified technologies that were outside the core business, yet still offered some potential for development. They then sought to license these technologies to other firms. IP licensing has proven quite lucrative for a number of large technology firms. IBM, for example, earns over one billion dollars per year from its IP licensing program.

In 2007 the U.S. Supreme Court made a number of decisions concerning patent rights. (These cases were: MedImmune v. Genentech, decided 8-1; KSR International v. Teleflex, decided 9-0; and Microsoft v. AT&T, decided 7-1.) To many observers the overall result of these cases, in the words of the Washington Post, “weakened the protection given to patent holders, making it more difficult to get a patent and easier to challenge existing ones.”

In 2008 the Supreme Court voted 9-0 in Quanta Computer, Inc. v. LG Electronics, Inc. in deciding to limit the reach of patent law regarding the “postsale use” of a product—particularly component parts used in the manufacture of another end product. The Court wrote, “The longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights in that item.”

SEE ALSO Entrepreneurship; Intellectual Property Rights; Licensing and Licensing Agreements

BIBLIOGRAPHY

Ambrogi, Robert J. “The Top Internet Sites for Patents, Trademarks.” Palm Beach Daily Business Review, 24 March 2004.

Barnes, Robert and Alan Sipress. “Rulings Weaken Patents' Power.” Washington Post, 1 May 2007. Available from: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/30/AR2007043001668_pf.html

Brown, Marc E. “New Kinds of Protection for Intellectual Property.” Electronic Business, 1 April 2003.

Geffken, Carl. “Protecting Your Intellectual Property: Understanding Your Rights Regarding Patents, Copyrights, and Trademarks Is Vital in Protecting Your Company's Offerings across the Globe.” Global Cosmetic Industry (January 2004).

McBride, Sarah, and Adam Thompson. “Google, Others Contest Copyright Warnings,” Wall Street Journal, 1 August 2007. Available from: http://online.wsj.com/article/SB118593806790484425.html.

O'Haver, R. Russ. “Management Intangibles: Capitalizing on Your IP Assets.” Journal of Internet Law (December 2003).

U.S. Patent and Trademark Office. “General Information Concerning Patents.” January 2005. Available from: http://www.uspto.gov/web/offices/pac/doc/general/index.html.

U.S. Small Business Administration. “Protecting Your Ideas.” Available from: http://www.sba.gov/starting_business/startup/ideas.html.

United States Supreme Court. MedImmune v. Genentech. January2007. Available from: http://www.supremecourtus.gov/opinions/06pdf/05-608.pdf.

United States Supreme Court. Microsoft v. AT&T. April 2007. Available from: http://www.supremecourtus.gov/opinions/06pdf/05-1056.pdf.

United States Supreme Court. KSR International v. Teleflex. April 2007. Available from: http://www.supremecourtus.gov/opinions/06pdf/04-1350.pdf.

United States Supreme Court. Quanta Computer, Inc. v. LG Electronics, Inc. June 2008. Available from: http://www.supremecourtus.gov/opinions/07pdf/06-937.pdf.