Intellectual property is the most valuable asset any business can have. Not only is it a substantial investment in both time and money, but it’s also what gives businesses a competitive edge and drives innovation in economies. It’s what makes your business marketable and helps build up your customer base. That’s why protecting your IP is crucial to your business’s success.
Intellectual property doesn’t just relate to your products and services—it also applies to your business name, your logo, slogans and any materials that you use in the marketing and operations of your business. And some of the best ways to protect all that valuable IP on a national level is to file for copyrights and trademarks.
“One of the most valuable assets that any business has is its intellectual property,” states Morvareed Salehpour, an attorney who specializes in contracts and intellectual property for small businesses. “It’s very important to be putting in some forethought and protecting those assets from day one.”
For small and medium-sized businesses that don’t have the manpower or budget of giant multinational corporations, protecting your IP with copyrights and trademarks is especially valuable. “They actually need the protection for their ideas, for their business, even more than larger companies,” says Raymond Chen, East West Bank client and president of David & Raymond International Patent Group. “How [will] they use the law to protect their business ideas?”
Unlike trademarks, copyright protection is given to the original author of an original work, published or unpublished, as soon as that work is created. Copyrights can apply to things like literary works, performance art, graphic design, video games, photographs, etc.—the definition of what can fall under copyright protection is extremely broad and covers a wide range of creative mediums. Generally, copyrights last for the lifetime of the author, plus an additional 70 years after, although there are certain exceptions.
For businesses, copyright protection comes most in handy when a third party is infringing on your intellectual property. In that case, it’s useful to register your copyright with the U.S. Copyright Office as soon as possible, recommends Deborah Sweeney, CEO and founder of MyCorporation, a company that specializes in helping businesses with copyrights and trademarks.
“If you’re going to take legal action, it’s critically important that you filed for your copyright,” Sweeney says. “Not only is that the designation that you own the copyright from the time that you created it, but it’s also the date that you are claiming you created it on.”
Conversely, if you hire a designer or want to use a third party’s creation for your own business, then it’s very important to make sure you have the right legal contracts in place to protect yourself from accidentally infringing on somebody else’s copyright, says Salehpour.
“There was one situation where a business had decided to hire someone to create some intellectual property for them, but they hadn’t actually gotten the rights to use that intellectual property transferred over to them, so they could use it in perpetuity,” Salehpour shares. “Instead, it was for a one-year time period. Later, they were in a situation where they were infringing on the other party’s intellectual property, because they had not gotten the rights to use that.”
According to the United States Patent and Trademark Office (USPTO), a trademark is defined as a “word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.” A service mark does the same thing but distinguishes the source of services rather than physical goods, although the term “trademark” is often used to refer to both goods and services. A trademark can be a business’s name, a tagline or slogan, symbols and even mascots—anything that a human being can recognize and link to a specific product or service, says Chen.
When you’re looking to trademark an aspect of your business, the first thing you have to do is conduct a search on the USPTO’s trademark database to make sure that the trademark you want to file isn’t similar to an existing one. The most thorough way to conduct a trademark search is through a company that offers such services, says Sweeney.
The purpose of a trademark is to protect the consumer from confusing one company’s goods and services with another’s, says Chen, but it can also help build up your business’s brand.
“You don’t want too many people or too many entities using your name,” Chen explains. “You want, when people think of the name, to go towards you. That’s why it’s better to have a registration of your trademark for your own products and for your business, too.”
It’s important to note there are two levels of trademark protection: one at the state level and the other with the USPTO, which provides nationwide protection.
“Many times, when people are starting a new business, their first thought is to incorporate and protect their assets by filing a corporation or LLC at their state level,” Sweeney explains. “By virtue of doing that, there is this notion that they have protected the trademark. The reality is that is not a protection of the trademark.”
The trademark you’re filing for has to be distinct, and the USPTO uses two criteria: how the mark looks and what goods and services correlate with that mark. Sweeney emphasizes, “It is important to think of not just the word itself, but in correlation of the services you are offering.”
She uses the Lockheed Corporation, known for its security and aerospace technology, as an example. For example, if a tree-cutting company wants to file a trademark for “Lockheed,” Sweeney says that the “USPTO might identify those as two distinct goods and services, enabling both to achieve trademark registration based on the differences between products and services that they offer.”
Before your trademark is officially registered with the USPTO, you can give notice that you own a mark by using a common law trademark, which is demarcated by a superscript TM (a registered trademark has an R with a circle around it).
“As long as you have proof that you are the one that first used that trademark, the state law—the common law protection—protects you,” says Chen. Similar to registering for an official trademark, you need to do a thorough trademark search before you claim any rights to a particular mark.
“It's important as you begin to use your mark in commerce, that you give notice with the TM, that you are claiming rights to own that trademark,” emphasizes Sweeney. “You’re traditionally going to invest in the building of your brand and your slogan, and the way you’re creating awareness is through marketing and expenditure of money to gain notoriety associated with your brand.”
Since trademarks are intended to protect consumers, businesses not only have the legal right to sue for trademark infringement, but are also required by the USPTO to take legal action when necessary. According to LegalZoom, even if it’s only a common law trademark, failure to “police” your mark can lead to loss of infringement protection.
Many times, business owners think that filing for a trademark is a straightforward process similar to copyright registration. “The truth is, that process can be lengthy, often in the range of nine months to one year,” says Sweeney.
You can file your trademark application online through the Trademark Electronic Application System (TEAS). Once you’ve submitted, the USPTO assigns an examiner to look into your trademark to evaluate the goods and services description, whether it conflicts with other existing marks and if the category you’ve chosen accurately correlates to those goods and services. Occasionally, if your mark is similar to another one, the examiner will ask you to explain how yours is unique, whether the two marks can exist simultaneously, or whether you can make adjustments to your goods and services description to ensure there is no conflict.
There are two types of trademark applications: intent to use and use in commerce. If you have a trademark that has not yet been used in commerce, but you plan to do so in the near future, you can file for intent to use.
“It’s just intent to use—not actual use,” explains Chen. “You may apply for it first, and then the trademark office will examine whether there’s a similar trademark. If not, they will allow your application but you won’t get your registration until you actually use the trademark in your business commerce.” Because of that, the earlier you use your trademark, the better.
Use in commerce means that you are already using your trademark to conduct business. To apply, you need to provide evidence to the USPTO of how you are using that mark.
“That goes back and forth with the examiner; they’ll often want clarification and samples, and they want to see how you're using your mark in commerce, how the customer would see the mark,” Sweeney adds.
After you receive your trademark registration, it’s up to you to make sure that you don’t lose it. Unlike copyrights, you can use a trademark for as long as you wish, as long as you can prove that you are continuously using it in commerce. Nationally registered trademarks need to be renewed every 10 years.
However, between the fifth and sixth year of your initial trademark registration, a business must submit a Section 8 declaration of use to the USPTO. Then at the 10 year mark, and every 10 years after that, you’ll have to provide photographic evidence that you are using the trademark in commerce, which can be a screenshot of a website or photo of a product using your mark, says Sweeney.
Protecting your business’s IP is a significant investment of time and money, and there are costs associated with both copyrights and trademarks.
Copyright registration is less expensive and more straightforward—it’s simply a record of your design or artwork, explains Chen. “They won’t examine any information in it,” he adds.
You can submit an online application, of which there is either a $35 fee for a single author claimant, or a $55 fee for all other applications. You can also submit a paper application, for a fee of $85.
On the other hand, trademark registration can become quite costly, especially for smaller businesses, so it’s imperative for businesses to be strategic in what they want to protect. You have to pay separate fees for each individual trademark and for each class of goods and services you’re registering under, says Sweeney. The USPTO’s electronic application fees start at $250 per class of goods and service. For trademark renewals, it costs $225 per class at the five-year mark and $525 per class at the 10-year mark. If you hire an attorney to handle this process, you will incur additional costs.
Sweeney says that some business owners will try to limit the number of trademark fees they have to pay by combining as much as they can into one class of goods and services. “That sometimes works—you just have to make sure that all of the words that you are using to describe your product fall within that particular goods and service description by the rules of the U.S. Patent and Trademark Office,” she says.
On the flip side, businesses might want to file for multiple classes because it provides much broader protection, even though it would cost more.
“If you want nationwide protection of your brand, it is important to think about a federal trademark registration,” Sweeney states.