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April 2007 — Vol. 85, No. 3
SMALL BUSINESS
Prevent pirating of your
intellectual property
Understand your company’s intellectual property rights
By Arthur G. Schaier
Partner, Intellectual Property Group, Carmody & Torrance
Securing, protecting and valuing your intellectual property is important to your business. But how much do you really know about your intellectual property rights — including those concerning patents, trade secrets, trademarks and copyrights — and how to safeguard them?
Take this short quiz, and you might be surprised to learn what you need to do to protect your business from intellectual-property pirates.
Question: You are developing a new business and want to protect the way you will obtain and process information related to the business. You know that others will easily copy the entire methodology once it’s introduced to the public. Is the possibility of protecting the methodology with a patent worth exploring?
Answer: Yes. A “business method” patent is a term used to describe a patent covering various types of process claims. While a “business method” might seem different from other types of conventional methods or processes, business-related processes should be awarded patent protection if they meet all the traditional criteria for patentability. (Find this and other information about patents on the Web site of the U.S. Patent and Trademark Office.)
Question: You invent an improved thirst-quenching beverage that has a unique blend of five ingredients. You discover that, while an acceptable ratio of ingredient A to ingredient B is between 4:1 and 5:1, a ratio of 4.3:1 provides optimal results. You are convinced it would be extremely difficult for competitors to figure out the optimal ratio of the ingredients. You want to file a patent application. Which of the following is correct?
A. In the patent application, you need only disclose the range of ingredients, not any specifics. After all, to disclose the optimal ratio of ingredients would give away your prized trade secret.
B. In the patent application, you must disclose the optimal ratio known to you at the time of filing the application.
C. Consider not filing a patent application and maintain the optimal ratio as a trade secret.
Answer: B and C. The patent laws require an inventor to set forth in a patent application the best mode contemplated of carrying out the invention. If you want to keep a key part of the formula a secret, you should consider maintaining the entire formula a trade secret.
Question: Can you monitor the patent application filings of your competitors?
Answer: Yes. Since 2001 the U.S. Patent and Trademark Office has been publishing patent applications. The published applications may be viewed as images or text, and can be found at www.uspto.gov/patft/index.html.
Previously, U.S. patent applications were held in confidence until a patent was granted. Now, the publication of applications can allow interested parties to find out what inventions their competitors are filing for. It might also accelerate innovation in a particular industry and may even provide an avenue to thwart off infringers while the application is pending.
Question: You own a relatively unique, well-known and valuable trademark. An unscrupulous individual has secured an Internet domain name using your mark in the domain. Is there a relatively quick and affordable alternative to litigation to seek the transfer of the domain name to you?
Answer: Yes. Unfortunately, individuals continue to divert Internet traffic by using domain names that are confusingly similar to other companies’ trademarks or trade names. Fortunately, the Uniform Domain-Name Dispute-Resolution Policy (UDRP) provides a way to resolve domain-name disputes. The UDRP may cancel or transfer a challenged domain name if three elements are proven:
- The domain name is confusingly similar to a trademark in which you have rights;
- The unscrupulous individual has no rights or legitimate interest in the domain name; and
- The name is being used in bad faith. For example, use of the domain name to advertise pornographic material might constitute evidence of bad faith.
Question: Assume that the pencil is currently protected by an existing patent held by Ace Pencil Co. You subsequently invent a product for erasing lead and obtain a patent on a writing instrument — a combination pencil with eraser. As an astute marketer, you know your combination pencil and eraser is more marketable than Ace’s pencil alone.
Just because you now have a patent on your product, can you market and sell your pencil and eraser without concern for Ace’s pencil patent?
Answer: No. The patent laws provide the right to exclude others from making, using and selling your patented invention. Obtaining a patent does not provide an automatic right to market and sell something you have patented. In fact, making and selling your improved pencil and eraser might infringe the underlying patent that covers the pencil itself.
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