Frequently Asked Questions

WHO MAY FILE A PATENT APPLICATION?

Only the true original inventor(s), or an authorized representative, such as an assignee or licensee, may file a patent application for an invention.

HOW CAN AN INVENTOR FIND OUT IF THE INVENTION IS ORIGINAL?

Before filing a patent application, it is wise to conduct a patent search to make sure the idea has not already been disclosed.

WHAT RIGHTS DOES THE INVENTOR HAVE IN THE INVENTION?

The inventor may sell ownership interest (or title) in the invention to anyone through assignment, and the inventor may receive either a lump sum payment, and/or a royalty payment based on the future sales of the invention by the assignee. Frequently, an inventor may want to keep the title to the patent but allow others to use the invention through the grant of a license in exchange for a fixed fee or in conjunction with royalty payments.

After the inventor has submitted a patent application to the U.S. Patent and Trademark Office (USPTO), the inventor may insert the notice ‘patent pending’ or ‘patent applied for’ onto the invention and accompanying material.

IN WHICH COUNTRIES IS THE INVENTION PROTECTED?

A U.S. patent is valid only within the United States. If one would like to have patent rights and protection in other countries, they will need to file a corresponding patent application in those countries. Note that this is generally a very expensive process.

WHAT TYPES OF TRADEMARKS OR SERVICE MARKS ARE ENTITLED TO LEGAL PROTECTION?

As a general rule, trademark law gives legal protection to names, logos, and other marketing devices that are distinctive. These distinctive trademarks are sometimes referred to as “strong” trademarks. Strong trademarks come in two forms: They may be “born strong” because they are creative or out of the ordinary, such as Yahoo, Exxon, or Kodak (also known as “inherently distinctive” marks). Trademarks may also become strong because they become well known to the public through their use over time or because of a marketing blitz.

Trademarks that merely describe some feature or quality of the goods or that are based on someone’s name or a geographic term are usually considered to be “weak,” and thus unprotectible under trademark law.

However, once the trademark owner can demonstrate substantial sales, advertising, or other public awareness of a weak trademark (known as “secondary meaning”), the trademark will be considered distinctive and can be registered with the United States Patent and Trademark Office (USPTO). Examples of weak marks that have acquired secondary meaning include Peet’s Coffee, Newman’s Own Salad Dressing, Bank of America, and Vision Center eyeglass stores.

If you’re ready to apply for trademark registration, Nolo can file a trademark application on your behalf. Nolo’s online interactive program gathers all the information needed to create your trademark filing, with practical help at each step. When the filing is complete, Nolo will send you a summary and confirmation of the filing with the USPTO, along with three important contracts that will help you protect your trademark, and a guide to maintaining your trademark rights.

ARE INTERNET DOMAIN NAMES COVERED BY TRADEMARK LAW?

The short answer is yes. Most people are familiar with website names like www.yahoo.com or www.amazon.com. The words between “www.” and the .com are typically used to identify the business that owns the website or a well-known product or service that is featured on the site. Frequently, this identifier is an abbreviation of the company or product name.

The U.S. Patent and Trademark Office allows these identifiers to be registered as trademarks as long as they are being used in connection with a site that sells goods or services. And the courts offer these domain names the same protection as other types of trademark.

CAN A BUSINESS’S TRADE NAME BE PROTECTED AS A TRADEMARK?

The name that a business uses to identify itself is called a “trade name.” This is the name the business uses on its invoices, letterhead, and signage. Technically, a trade name is not considered a trademark or entitled to protection under trademark laws unless it actually adorns a product or service.

If a business does use its name to identify a product or service produced by the business, the name will then be considered a trademark or service mark and be entitled to protection (if it is distinctive enough). For instance, Apple Computer Corporation uses the trade name Apple as a trademark on its line of computer products.

A trade name that is not used on a product or service may be given some protection under state and local laws (through corporate, LLC, or fictitious business name registration) or be protected against a confusing use by a competing business under federal and state unfair competition laws.

For information on choosing a name for your business rather than product or service names, see the Naming Your Business section of Nolo’s website.

IS STATE OR FEDERAL LAW USED TO SETTLE TRADEMARK DISPUTES?

A number of legal principles used to protect owners against improper use of their trademarks derive from federal laws known collectively as the Lanham Act (Title 15 U.S.C. §§1051 to 1127).

In addition, all states have statutes that govern the use and protection of marks within the state’s boundaries. In addition to laws that specifically protect trademark owners, states also have laws that protect one business against unfair competition by another business, including the use by one business of a name already used by another business in a context that’s likely to confuse customers.

The basic rules for resolving disputes over who is entitled to use a trademark come from decisions by both federal and state courts (called “common law”). These rules usually favor the business that first used a trademark, if another company’s use of the same trademark would be likely to cause customer confusion.

WHY SHOULD I REGISTER MY WORK WITH THE U.S. COPYRIGHT OFFICE?

You must register your copyright with the U.S. Copyright Office before you are legally permitted to bring a lawsuit to enforce it.

You can register a copyright at any time, but registering it promptly may pay off in the long run. “Timely registration” — that is, registration within three months of the work’s publication date or before any copyright infringement actually begins — makes it much easier to sue and recover money from an infringer. Specifically, timely registration creates a legal presumption that your copyright is valid, and allows you to recover up to $150,000 (and possibly lawyer fees) without having to prove any actual monetary harm.

HOW DO I REGISTER A COPYRIGHT?

You can register your copyright by filing a simple form and depositing one or two samples of the work (depending on what it is) with the U.S. Copyright Office. There are different forms for different types of works — for example, form TX is for literary works while form VA is for a visual art work. Forms and instructions may be obtained from the U.S. Copyright Office by telephone, 202-707-9100, or online at www.copyright.gov.

Registration currently costs $45 per work. If you’re registering several works that are part of one series, you may be able to save money by registering the works together (called “group registration”).

For detailed information on the registration process, see The Copyright Handbook, by Stephen Fishman (Nolo).

WHAT ROLE DOES A COPYRIGHT NOTICE PLAY?

Until 1989, a published work had to contain a valid copyright notice to receive protection under the copyright laws. But this requirement is no longer in force — works first published after March 1, 1989 need not include a copyright notice to gain protection under the law.

But even though a copyright notice is not required, it’s still important to include one. When a work contains a valid notice, an infringer cannot claim in court that he or she didn’t know it was copyrighted. This makes it much easier to win a copyright infringement case and perhaps collect enough damages to make the cost of the case worthwhile. And the very existence of a notice might discourage infringement.

Finally, including a copyright notice may make it easier for a potential infringer to track down a copyright owner and legitimately obtain permission to use the work.

WHAT IS A VALID COPYRIGHT NOTICE?

A copyright notice should contain:

  • the word “copyright”
  • a “c” in a circle (©)
  • the date of publication, and
  • the name of either the author or the owner of all the copyright rights in the published work.

HOW ARE COPYRIGHTS ENFORCED?

If someone violates the rights of a copyright owner, the owner is entitled to file a lawsuit in federal court asking the court to:

  • issue orders to prevent further violations (restraining orders and injunctions)
  • award money damages if appropriate, and
  • in some circumstances, award attorney fees.

Whether the lawsuit will be effective and whether damages will be awarded depends on whether the alleged infringer can raise one or more legal defenses to the charge.

WHAT ARE DEFENSES TO A CLAIM OF COPYRIGHT INFRINGEMENT?

Common legal defenses to copyright infringement include:

  • Too much time has elapsed between the infringing act and the lawsuit (the statute of limitations defense).
  • The infringement is allowed under the fair use doctrine.
  • The infringement was innocent (the infringer had no reason to know the work was protected by copyright).
  • The infringing work was independently created (that is, it wasn’t copied from the original).
  • The copyright owner authorized the use in a license.

If someone has good reason to believe that a use is fair — but later finds herself on the wrong end of a court order — she is likely to be considered an innocent infringer at worst. Innocent infringers usually don’t have to pay any damages to the copyright owner, but do have to cease the infringing activity or pay the owner for the reasonable commercial value of that use.

DO COUNTRIES OUTSIDE THE U.S. OFFER THE SAME COPYRIGHT PROTECTION?

Copyright protection rules are fairly similar worldwide, due to several international copyright treaties, the most important of which is the Berne Convention. Under this treaty, all member countries — and there are more than 100, including virtually all industrialized nations — must afford copyright protection to authors who are nationals of any member country.

All countries in the Berne Convention must offer copyright protection that lasts for at least the life of the author plus 50 years, and must be automatic without the need for the author to take any legal steps to preserve the copyright.

In addition to the Berne Convention, the GATT (General Agreement on Tariffs and Trade) treaty contains a number of provisions that affect copyright protection in signatory countries.

Together, the Berne Copyright Convention and the GATT treaty allow U.S. authors to enforce their copyrights in most industrialized nations, and allow the nationals of those nations to enforce their copyrights in the United States.

What every business owner should know about trade secret law.

WHAT IS A TRADE SECRET?

In most states, a trade secret may consist of any formula, pattern, physical device, idea, process or compilation of information that both:

  • Provides the owner of the information with a competitive advantage in the marketplace, and
  • Is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft.

Some examples of potential trade secrets are:

  • A formula for a sports drink
  • Survey methods used by professional pollsters
  • Recipes
  • A new invention for which a patent application has not yet been filed
  • Marketing strategies
  • Manufacturing techniques, and
  • Computer algorithms.

Unlike other forms of intellectual property such as patents, copyrights and trademarks, trade secrecy is basically a do-it-yourself form of protection. You don’t register with the government to secure your trade secret; you simply keep the information confidential. Trade secret protection lasts for as long as the secret is kept confidential. Once a trade secret is made available to the public, trade secret protection ends.

WHAT TYPES OF INFORMATION CAN TRADE SECRETS PROTECT?

Trade secrets often protect valuable technical information that cannot be sheltered under other forms of intellectual property law, such as the formula for Coca-Cola. Trade secrets may also:

  • Protect ideas that offer a business a competitive advantage, thereby enabling a company or individual to get a head start on the competition — for example, an idea for a new type of product or a new website

  • Keep competitors from learning that a product or service is under development and from discovering its functional or technical attributes — for example, how a new software program works

  • Protect valuable business information such as marketing plans, cost and price information and customer lists — for example, a company’s plans to launch a new product line

  • Protect “negative know-how” — that is, information you’ve learned during the course of research and development on what not to do or what does not work optimally — for example, research revealing that a new type of drug is ineffective, or

  • Protect any other information that has some value and is not generally known by your competitors — for example, a list of customers ranked by how profitable their business is.

WHAT RIGHTS DOES THE OWNER OF A TRADE SECRET HAVE?

A trade secret owner can prevent the following groups of people from copying, using, or benefiting from its trade secrets or disclosing them to others without permission:

  • People who are automatically bound by a duty of confidentiality not to disclose or use trade secret information, including any employee who routinely comes into contact with the employer’s trade secrets as part of the employee’s job

  • People who acquire a trade secret through improper means such as theft, industrial espionage or bribery

  • People who knowingly obtain trade secrets from people who have no right to disclose them

  • People who learn about a trade secret by accident or mistake, but had reason to know that the information was a protected trade secret, and

  • People who sign nondisclosure agreements (also known as “confidentiality agreements”) promising not to disclose trade secrets without authorization from the owner. This may be the best way for a trade secret owner to establish a duty of confidentiality.

There is one group of people that cannot be stopped from using information protected under trade secret law. These are people who discover the secret independently, that is, without using illegal means or violating agreements or state laws. For example, it is not a violation of trade secret law to analyze (or “reverse engineer”) any lawfully obtained product and determine its trade secret.

EXAMPLE

XCEL glue is comprised of a trade secret protected formula. Phil, a chemist, analyzes the contents of XCEL glue, determines its composition and recreates the formula. Phil can legally use this information to make and sell his own glue.

HOW CAN A BUSINESS PROTECT ITS TRADE SECRETS?

Simply calling information a trade secret will not make it so. A business must affirmatively behave in a way that proves its desire to keep the information secret. Some companies go to extreme lengths.

EXAMPLE

The formula for Coca-Cola (perhaps the world’s most famous trade secret) is kept locked in a bank vault that can be opened only by a resolution of the Coca-Cola Company’s board of directors. Only two Coca-Cola employees ever know the formula at the same time; their identities are never disclosed to the public and they are not allowed to fly on the same airplane.

Fortunately, extraordinary trade secrecy protection measures are seldom necessary. Although you should take reasonable precautions to protect any information you regard as a trade secret, you don’t have to turn your office into an armed camp to do so. Sensible precautions include marking documents containing trade secrets “Confidential,” locking trade secret materials away after business hours, maintaining computer security and only providing access to secret information to people with a reasonable need to know.

But the very best way to protect trade secrets is through use of nondisclosure agreements. Courts have repeatedly reiterated that the use of nondisclosure agreements is the most important way to maintain the secrecy of confidential information.

HOW CAN A BUSINESS ENFORCE ITS RIGHTS IF SOMEONE STEALS OR IMPROPERLY DISCLOSES CONFIDENTIAL INFORMATION?

Every state has a law prohibiting theft or disclosure of trade secrets. Most of these laws are derived from the Uniform Trade Secrets Act (UTSA), a model law drafted by legal scholars. A listing of states that have adopted some version of the UTSA is provided at the end of this FAQ.

A trade secret owner can enforce rights against someone who steals confidential information by asking a court to issue an order (an injunction) preventing further disclosure or use of the secrets. A trade secret owner can also collect damages for any economic injury suffered as a result of the trade secret’s improper acquisition and use. Here are some examples of incidents that can lead to trade secret lawsuits:

  • Sarah, a former employee of C-com, discloses C-com trade secrets to her new employer.
  • Mary hacks her way into the network for a computer company and downloads the specs for a new silicon chip. She sells the information to a third party — a rival computer company.
  • Sheldon is a software programmer who works as an independent contractor for Diskco. Sheldon signed a nondisclosure agreement with Diskco, but later discloses Diskco secrets to a rival.

To prevail in a trade secret infringement suit, a trade secret owner must show (1) that the information alleged to be confidential provides a competitive advantage and (2) the information really is maintained in secrecy. In addition, the trade secret owner must show that the information was either improperly acquired by the defendant (if the defendant is accused of making commercial use of the secret) or improperly disclosed by the defendant (if the defendant is accused of leaking the information).

The “Inevitable Disclosure” Doctrine

In some cases, a company may prevent a former employee from working for a competitor if the company can demonstrate that employment with the competitor will inevitably lead to disclosure of trade secrets. In a 1995 case, PepsiCo successfully argued that a former executive could not work as Chief Executive Officer of Gatorade/Snapple because the executive could not help but rely on PepsiCo’s trade secrets as he plotted Gatorade and Snapple’s new course, giving the competitor an unfair advantage over PepsiCo.

Some states have rejected the inevitable disclosure doctrine because it challenges an employee’s basic freedom to switch employers. In one case, a court refused to apply the doctrine unless there was additional showing of bad faith, underhanded dealing, or employment by a competitor lacking comparable technology.

IS STEALING TRADE SECRETS A CRIME?

Intentional theft of trade secrets can constitute a crime under both federal and state laws. The most significant federal law dealing with trade secret theft is the Economic Espionage Act of 1996 (EEA) (18 U.S.C., Sections 1831 to 1839). The EEA gives the U.S. Attorney General sweeping powers to prosecute any person or company involved in trade secret misappropriation and punishes intentional stealing, copying or receiving of trade secrets. Penalties for violations are severe: Individuals may be fined up to $500,000 and corporations up to $5 million. A violator may also be sent to prison for up to ten years. All property used and proceeds derived from the theft can be seized and sold by the government.

The EEA applies not only to thefts that occur within the United States, but also to thefts outside the U.S. if the thief is a U.S. citizen or corporation, or if any act in furtherance of the offense occurred in the U.S. If the theft is performed on behalf of a foreign government or agent, the corporate fines can double and jail time may increase to 15 years.

Several states have also enacted laws making trade secret infringement a crime. For example, in California it is a crime to acquire, disclose or use trade secrets without authorization. Violators may be fined up to $5,000, sentenced to up to one year in jail, or both. (Cal. Penal Code Section 499c.)

STATES THAT HAVE ADOPTED SOME VERSION OF THE UNIFORM TRADE SECRETS ACT
State Statute
Alabama* Ala. Code. §§ 8-27-1 et seq.
Alaska Alaska Stat. §§ 45.50.910 et seq.
Arkansas Ark. Stat. Ann. §§ 4-75-601 et seq.
California Cal. Civ. Code §§ 3426 et seq.
Colorado Col. Rev. Stat §§ 7-74-101
Connecticut Conn. Genl. Stat. §§ 35-50 et seq.
Delaware Del. Code Ann. Title 6 §§ 2001 et seq.
District of Columbia D.C. Code Ann. §§ 36-401 et seq.
Florida Fla. Stat Ann. §§ 688.001 et seq.
Hawaii Haw. Rev. Stat. §§ 482B-1 et seq.
Idaho Idaho Code §§ 48-801 et seq.
Illinois Ill. Ann. Stat. ch. 140 §§ 351-59
Indiana Ind. Code. Ann. §§ 24-3-1
Kansas Kan. Stat. Ann. §§ 60-3320 et seq.
Louisiana La. Rev. Stat. Ann. §§ 51:1431 et seq.
Maine M.R.S.A. Title 10 §§ 1541 et seq.
Maryland Md. Com. L. Code §§ 11-1201 et seq.
Minnesota Minn. Stat Ann. §§ 325C.01 et seq.
Montana Mont. Code Ann. §§ 30-14-401 et seq.
Nebraska Neb. Rev. Stat. §§ 87-501 et seq.
Nevada Nev. Rev. Stat. §§ 600A.010 et seq.
New Mexico N.M. Stat. Ann.§§ 57-3A-1 et seq.
North Carolina* N.C. Gen. Stat. §§ 66-152 et seq.
North Dakota N.D. Cent. Code §§ 47-25.1-01 et seq.
Oklahoma Okl. Genl. Laws §§ 6-41-1
Oregon Or. Rev. Stat. §§ 646.461 et seq.
Rhode Island R.I. Gen. Laws §§ 6-41-1 et seq.
South Dakota S.D. Cod. Laws §§ 37-29-1 et seq.
Utah Utah Code Ann. §§ 13-24-1 et seq.
Virginia Va. Code. Ann. §§ 59.1-336 et seq.
Washington Wash. Rev. Code. Ann. §§ 19.108.010 et seq.
West Virginia W. VA. Code. §§ 47-22-1 et seq.
Wisconsin Wis. Stat. Ann. § 134.90

* Although they have adopted portions of the UTSA, Alabama and North Carolina are considered to have taken “major departures” from the UTSA because Alabama narrows trade secret protection while North Carolina broadens it.

More Information About Trade Secrets

For a more detailed explanation of trade secrets and nondisclosure agreements, as well as the full text of the Uniform Trade Secrets Act, see www.ndasforfree.com.

If someone violates your patent, you can take legal steps to stop the infringement.
 

WHAT CONSTITUTES INFRINGEMENT OF A PATENT?

To decide whether an inventor is violating (infringing) a patent, it is necessary to carefully examine the patent’s “claims.” (Claims are terse statements of the scope of the invention, and most patents contain more than one of them.) The elements of each claim must be compared with the elements of the accused infringer’s invention (usually a device or process).

If the elements of a patent claim match the elements of the device or process (called “reading on” or “teaching” the device or process), an infringement has occurred. Even if the claims don’t literally match the elements of the infringing device, it is possible that a court would find an infringement by applying what’s known as the “doctrine of equivalents”; that is, the patented invention and the allegedly infringing device or process are sufficiently equivalent in what they do and how they do it to warrant a finding of infringement.

For example, Steve invents a tennis racket with a score keeper embedded in the racket handle’s end. The invention is claimed as a tennis racket handle that combines grasping and score-keeping functions. Steve receives a patent on this invention. Later, Megan invents and sells a tennis racket with a transparent handle that provides a more sophisticated score-keeping device than Steve’s racket. Even though Megan’s invention improves on Steve’s invention in certain respects, it will most likely be held to be an infringement of Steve’s invention, for one of two reasons:

  • Megan’s invention teaches the same elements as those claimed in Steve’s patent (a tennis racket handle with two functions), or
  • When considering what it is and how it works, Megan’s invention is the substantial equivalent of Steve’s invention (using the doctrine of equivalents).

In 2002, the Supreme Court handed down a ruling ( Festo Corp. v. Shoketsu Kinzoku Kabushiki Co. Ltd., 535 U.S. 722 (2002)) that makes it harder for patent owners who amended their patent claims to assert that others are infringing their patent. In essence, patent owners can use the doctrine of equivalents only if they can show that their amendment did not “surrender” the equivalents at issue — a complex and confusing standard that requires the advice of a patent attorney.

In 2007, the Supreme Court modified the standard of nonobviousness applied in patent infringement cases for combination inventions and determined that “ordinary innovations” are not patentable (KSR v. Teleflex, 550 U.S. __ 2007).

If a case is brought to enforce a patent on a method or process invention, the defendant can escape liability if they were using the invention more than one year prior to the patent application date.

WHAT REMEDIES ARE AVAILABLE FOR PATENT INFRINGEMENT?

A patent owner may enforce his patent by bringing a patent infringement action (lawsuit) in federal court against anyone who uses his invention without permission. If the lawsuit is successful, the court will take one of two approaches. It may issue a court order (called an injunction) preventing the infringer from any further use or sale of the infringing device, and award damages to the patent owner. Or, the court may work with the parties to hammer out an agreement under which the infringing party will pay the patent owner royalties in exchange for permission to use the infringing device.

Bringing a patent infringement action can be tricky, because it is possible for the alleged infringer to defend herself by proving to the court that the patent is really invalid (most often by showing that the U.S. Patent and Trademark Office (USPTO) made a mistake in issuing the patent in the first place). In a substantial number of patent infringement cases, the patent is found invalid and the lawsuit dismissed, leaving the patent owner in a worse position than before the lawsuit.

WHEN DOES PATENT PROTECTION END?

Patent protection usually ends when the patent expires. Here are the expiration dates:

  • For all utility patents filed before June 8, 1995, the patent term is 20 years from date of filing, or 17 years from date of issuance, whichever period is longer.
  • For utility patents filed on or after June 8, 1995, the patent term is 20 years from the date of filing.
  • For design patents, the period is 14 years from date of issuance.
  • For plant patents, the period is 17 years from date of issuance.

A patent may expire if its owner fails to pay required maintenance fees. Usually this occurs because attempts to commercially exploit the underlying invention have failed and the patent owner chooses to not throw good money after bad.

Patent protection ends if a patent is found to be invalid. This may happen if someone shows that the patent application was insufficient or that the applicant committed fraud on the U.S. Patent and Trademark Office (USPTO), usually by lying or failing to disclose the applicant’s knowledge about prior art that would legally prevent issuance of the patent. A patent may also be invalidated if someone shows that the inventor engaged in illegal conduct when using the patent — such as conspiring with a patent licensee to exclude other companies from competing with them.

Once a patent has expired or has been invalidated, the invention described by the patent falls into the public domain: it can be used by anyone without permission from the owner of the expired patent. The basic technologies underlying television and personal computers are good examples of valuable inventions that are no longer covered by in-force patents.

The fact that an invention is in the public domain does not mean that subsequent developments based on the original invention are also in the public domain. Rather, new inventions that improve public domain technology are constantly being conceived and patented. For example, televisions and personal computers that roll off today’s assembly lines employ many recent inventions that are covered by in-force patents.

WHAT ARE THE DIFFERENT STAGES OF A PATENT’S LIFE?

Although most inventors are concerned with the rights a patent grants during its monopoly, or in-force, period (from the date the patent issues until it expires), the law actually recognizes five “rights” periods in the life of an invention. These five periods are as follows:

  1. 1. Invention conceived but not yet documented. When an inventor conceives an invention, but hasn’t yet made any written, signed, dated, and witnessed record of it, the inventor has no rights whatsoever.

  2. 2. Invention documented but patent application not yet filed. After making a proper, signed, dated, and witnessed documentation of an invention, the inventor has valuable rights against any inventor who later conceives the same invention and applies for a patent. The invention may also be treated as a “trade secret” — that is, kept confidential — which gives the inventor the legal right to sue and recover damages against anyone who immorally learns of the invention (for example, through industrial spying).

  3. 3. Patent pending (patent application filed but not yet issued). During the patent pending period, including the one-year period after a provisional patent application is filed, the inventor’s rights are the same as in Period 2 above. With one exception, discussed below, a patent application does not give an inventor any extra rights — only the hope of a future monopoly that begins when a patent issues. However, most companies that manufacture a product that is the subject of a pending patent application will mark the product “patent pending” in order to warn potential copiers that if they copy the product, they may have to stop later (and thus scrap all their molds and tooling) if and when a patent issues.

    Eighteen months after filing, and while the application is pending, the U.S. Patent and Trademark Office (USPTO) will publish the application unless the applicant files a Nonpublication Request at the time of filing and doesn’t file for a patent outside the U.S. If the application is published during the pendency period, an inventor can later obtain royalties from an infringer from the date of publication provided (1) the application later issues as a patent; and (2) the infringer had actual notice of the published application.

  4. 4. In-force patent (patent issued but hasn’t yet expired). After the patent issues, the patent owner can bring and maintain a lawsuit for patent infringement against anyone who makes, uses, or sells the invention without permission. The patent’s in-force period lasts from the date it issues until it expires. Also, after the patent issues, it becomes a public record or publication that blocks others from getting patents on the same or similar inventions — that is, it becomes “prior art” to anyone who files a subsequent patent application.

  5. 5. Patent expired. After the patent expires, the patent owner has no further rights, although infringement suits can still be brought for any infringement that occurred during the patent’s in-force period, as long as the suit is filed within the time required by law. An expired patent remains a valid “prior-art reference” forever.

Once you have a patent, learn how to make it profitable by licensing or selling it.

HOW CAN AN INVENTOR MAKE MONEY WITH A PATENT?

Some inventors start new companies to develop and market their patented inventions. This is not typical, however, because the majority of inventors would rather invent than run a business. More often, an inventor patents the invention but makes arrangements with an existing company to develop and market the invention. This arrangement usually takes the form of a “license,” a contract under which the developer is authorized to commercially exploit the invention (for a period of time) in exchange for paying the patent owner royalties. The royalties may be a percentage of the net revenues or may be a payment for each invention sold. Alternatively, the inventor may sell all of the rights to the invention for a lump sum or royalties (known as an assignment).

WHAT DOES IT MEAN TO “LICENSE” AN INVENTION?

A license is written authorization to exploit an invention. An inventor usually authorizes a manufacturer (the licensee) to make and sell the invention in exchange for paying the inventor royalties.

A license may be exclusive (if only one manufacturer is licensed to develop the invention) or non-exclusive (if a number of manufacturers are licensed to develop it). The license may be for the duration of the patent or for a shorter period of time. The territory is usually limited to the geographic extent of the patent protection. For example, the owner of a U.S. patent will license the rights for the U.S. but will not be able to exploit beyond that patent territory.

The licensee may in turn license other companies to market or distribute the invention. The extent to which the inventor will benefit from these sub-licenses depends on the terms of the main agreement between the inventor and the licensee.

In some cases, an inventor or a company may trade licenses with other companies — called cross-licensing — so that companies involved in the trade will benefit from each other’s technology. For example, assume that two computer companies each own several patents on newly developed remote-control techniques. Because each company would be strengthened by being able to use the other company’s inventions as well as its own, the companies may agree to swap the licenses of their respective inventions.

For more on the ins and outs of licensing your invention, see Should You License or Manufacture Your Invention?.

CAN INVENTORS WHO ARE EMPLOYED BY A COMPANY BENEFIT FROM THEIR OWN INVENTIONS?

Typically, employee-inventors who invent something in the course of their employment are bound by employment agreements that automatically assign all rights in the invention to the employer. While smart research and development companies give their employee-inventors bonuses for valuable inventions, this is a matter of contract rather than law.

Even without a written employment agreement, an employer may own rights to an employee-created invention under the “employed-to-invent” doctrine. If an inventor is employed — even without a written employment agreement — to accomplish a defined task, or is hired or directed to create an invention, the employer will own all rights to the subsequent invention. Most companies prefer to use a written employment agreement because it is more reliable and easier to enforce than an implied agreement.

Both written employment agreements and the “employed-to-invent” rule allow the employer to become the owner of all patent rights. An employer may also aquire a “shop right,” rather than ownership of patent rights.

Under a shop right, the employee-inventor retains ownership of the patent, but the employer has a right to use the invention without paying the employee-inventor. A shop right can occur only if the employee-inventor uses the employer’s resources (materials, supplies, time) to create an invention. Other circumstances may be relevant, but use of employer resources is the most important criterion.

For example, Robert is a machinist in a machine shop and, using his employer’s resources, invents a new process for handling a particular type of metal. If Robert hasn’t signed an employment agreement giving his employer all rights to the invention and if Robert was not employed to invent, Robert can patent and exploit the invention for himself. His employer, however, would retain the right to use the new process without having to pay Robert.

Trademarks, service marks, certification marks, collective marks, trade dress — learn the difference, as well as when use of an existing trademark is acceptable.

WHAT IS A TRADEMARK OR SERVICE MARK?

A trademark is a distinctive word, phrase, logo, domain name, graphic symbol, slogan, or other device that is used to identify the source of a product and to distinguish a manufacturer’s or merchant’s products from others. Some examples are Nike for sports apparel, Gatorade for beverages, and Microsoft for software.

A service mark does the same thing as a trademark, but while trademarks promote products, service marks promote services and events. Some familiar service marks are: Google (online searching services), Netflix (video rental service), and the FedEx logo (delivery services).

In order to be eligible for trademark protection, a word or phrase must be “distinctive” — unique enough to help customers recognize a particular product in the marketplace — rather than generic, like “The Coffee House.” To determine whether a potential business name or product name is trademarkable, and how to trademark it, see Trademark: Legal Care for Your Business & Product Name, by Attorneys Stephen Elias and Richard Stim (Nolo), or the Qualifying for Trademark Protection FAQ.

WHAT IS TRADE DRESS?

In addition to a label, logo, or other identifying symbol, a product may come to be known by its distinctive packaging — for example, the blue and yellow packaging of the Advil pain reliever box. Similarly, a service may become known by its distinctive decor or shape — for example, the yellow arches that symbolize McDonald’s franchises.

Collectively, these types of identifying features are commonly termed “trade dress.” Because trade dress often serves the same function as a trademark or service mark — the identification of goods and services in the marketplace — trade dress can be protected under the federal trademark laws and, in some cases, registered as a trademark or service mark with the U.S. Patent and Trademark Office (USPTO).

WHEN CAN A TRADEMARK OWNER STOP SOMEONE FROM USING THE TRADEMARK?

Consumers often make their purchasing choices on the basis of recognizable trademarks. For this reason, the main thrust of trademark law is to make sure that trademarks don’t overlap in a manner that causes customers to become confused about the source of a product.

If two similar trademarks are being used by companies that provide different products or services, there may not be a trademark conflict. This is especially true if the two businesses serve only local markets and are hundreds of miles apart.

However, in the case of trademarks that have become famous — for example, McDonald’s — the courts are willing to grant broader protection and prohibit almost all use of the trademark (or anything close to it) by anyone other than the famous mark’s owner.

For more information on how to prevent others from using a trademark, see Enforcing Your Trademark Rights.