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2009-01



 Intellectual Property Part 1

The most successful and progressive societies are those that reward people who make significant contributions for the betterment of humankind. In our capitalist system, we have enacted intellectual property laws that formalize this reward system. These laws cover patents, trademarks, copyright and trade secrets, as well as Web property such as domain names. In this column and the next one, I shall discuss these topics.

 

Patents

There are three types of patents:

 

1) Utility patents may be granted to anyone who invents, discovers or improves any new and useful process, machine, article of manufacture, or composition of matter. This includes any kind of mechanical or electrical apparatus or device, methods of manufacturing, chemicals, and pharmaceuticals. Recent advances in biotechnology have stimulated the filing of numerous patents based on genetic sequences of amino acids. Another type of patent, called method of doing business has also become common. These include, for example, processes used in Internet commerce.

 

2) Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture. Examples of design patents include flower patterns on fabric, architectural designs, fashion design, and styled music players. Design patents are less expensive to obtain but provide less protection to the inventor than utility patents because they are more easily circumvented.

 

3) Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant. Asexual reproduction ensures that the offspring of the patented organism are genetically identical to the parents and therefore can be unambiguously described.

 

In granting a patent to an inventor, the government rewards him for his contribution by recognizing him as the owner of his invention and by conferring to him “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. Patents are filed at the US Patent and Trademark Office (USPTO.) In return, the inventor makes public a description of the invention detailed enough to enable a person versed in the arts to construct the invention without undue trials and errors. The inventor must also disclose what, in his opinion, is the best example of the invention.

Generally, the term of a new patent is 20 years from the date on which the application for the patent is filed assuming all maintenance fees are paid.

In some cases, an inventor may not want to patent his invention. Forgoing the patent carries some risks: someone else may independently discover his invention and patent it. The original inventor may then be considered to have abandoned his invention and lose all rights to it. He may even be forced to pay royalties to the new patent owner. What should he do?

Defensive Publications

The inventor can make his invention public by publishing a detailed description of it. In doing so he loses all exclusive rights to it, and so does everyone else. The invention enters the public domain and can be used freely by anyone.

 

Trade Secrets

The inventor’s second approach is to protect his invention as a trade secret. To qualify as a trade secret the invention must not be generally known to the public, must provide an economic advantage to the owner over competitors or customers and must be subject to reasonable efforts to maintain its secrecy. He can protect its confidential information through non-compete and non-disclosure contracts with its employees or consultants. In addition, the owner must be actively using it, otherwise the invention is considered to be abandoned and the inventor automatically loses all rights to it. An example of a trade secret is the Coca Cola formulation.

Trade secrets arise out of state laws and not out of federal courts. Most states have adopted the Uniform Trade Secrets Act (UTSA). Only Massachusetts, New York, New Jersey, North Carolina, and Texas have not adopted the UTSA. So, the law may vary slightly from jurisdiction to jurisdiction.

The law of protection of confidential information effectively allows a perpetual monopoly in secret information. Therefore trade secrets do not expire as do patents. However, the lack of formal protection also means that a third party may independently duplicate, use and patent this information.

What if this third party now sues the original holder of the trade secret for infringement? The original holder of the trade secret can defeat the lawsuit by showing that he knew of, and was using the invention all along, before the patent was filed, and therefore that the patent owner is not the first inventor of the invention. The patent would then be declared invalid and enter the public domain for everyone to use freely.

 

For archived newsletters and a lot of information for the small inventor go to: www.patentsandventures.com. If you have any question you can contact me at (858)259-2226 or email me at glevy@patentsandventures.com. This newsletter should not be construed as legal advice. ©2010 by George Levy.

 

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