Wednesday, February 17, 2010

IP Basics - Part 1

Intellectual property (IP) includes patents, trademarks, copyrights and trade secrets. Simplistically, patents protect discoveries and inventions; trademarks protect words, phrases, symbols and/or designs associated with goods and/or services; copyrights protect artistic works; and trade secrets protect secrets within a company, organization, etc. Note that none of the above protects “ideas,” and in and of themselves, ideas are not protectable.

IP is a nontangible asset that is generally treated as real property. As such, a patent, trademark, etc., can be part of an estate, bankruptcy proceeding, contract for sale or license for use. In dealing with IP, an attorney has a duty of due diligence to determine the status of the IP. For example, the term or life of a utility patent is twenty (20) years from the date of filing. However, if appropriate maintenance fees are not paid to the U.S. Patent and Trademark Office (USPTO) throughout the life of the patent, the patent becomes abandoned (due to non-payment of maintenance fees) and thus non-enforceable before the 20 year lifetime has expired. Trademarks and copyrights can also expire/become abandoned. As such, a piece of IP can be over-valued or under-valued based on its status. It is also of interest to note that malpractice insurance for IP attorneys is among the highest in the industry due to the potential liability for missing a filing date, maintenance fee date, etc.

Issuance of U.S. patent is the exclusive domain of the USPTO. A word, phrase, etc. can be federally registered as a tradmark with/through the USPTO, however this is not required in order to have trademarks rights in the word, phrase, etc. Likewise, an artistic work can be federally copyrighted through the U.S. Copyright Office, however this is not required. The main benefit for federal registry of a trademark is the issuance of trademark rights throughout the U.S. and its territories. The main benefit of a federal registered copyright is that statutory damages are granted in the event of copyright infringement and thus proof of damages is not required.

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