Comparing Patents, Trademarks, Copyrights and
Trade Secrets
by Glenn R. Smith
Introduction
Intellectual property is a collective term referring to the rights protecting the creative endeavors of individuals and organizations. Intellectual property includes patents, trademarks, copyrights and trade secrets. To gain a basic understanding of intellectual property, it is useful to compare these various facets. Roughly speaking, patents describe and claim inventions; trademarks identify the source of commercial goods; copyrights define exclusive rights in the literary or artistic works of authors; and trade secrets encompass legally-protectable information that is economically valuable and not publicly disclosed. This article further expounds on these distinctions.
Patents
A patent is a government-granted right issued to an inventor to exclude others from making, using, offering to sell, selling or importing an invention for a particular term of years. Each country has different patent laws, and a patent only offers protection in the country issuing the patent.
The legal authority for both patents and copyrights is derived from the U.S. Constitution. Specifically, Article I, Section 8 states, in part, that "The Congress shall have power . . . To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Based on this authority, Congress passed Title 35 of the United States Code setting forth specific patent laws. Specific sections of this code are referenced as 35 U.S.C. §---. The federal agency charged with administering these patent laws is the Patent and Trademark Office (PTO). Its regulations are found in Parts 2-6 of Title 37 of the Code of Federal Regulations. Enforcement of patent law is the exclusive domain of the federal courts. Appeals from federal district court decisions can be made only to the Federal Circuit court.
Notice that an article is patented is typically given by fixing thereon the word "patent" or the abbreviation "pat." together with the number of the issued patent. 35 U.S.C. §287. This notice might appear, for example, as "Patent 5,500,050" or "Pat. No. 5,500,050." Until actual notice is given to an infringer, damages cannot be recovered for patent infringement if an article is not so marked. The term "Patent Pending" is a notice that a patent has been applied for. However, no patent rights accrue until such a patent issues.
Trademarks
A trademark is typically a distinctive word, phrase or symbol that can be used to identify the source, origin or sponsorship of a product and distinguish it from those of competitors. Trademarks can also be distinctive configurations, colors, musical notes, sounds or anything else that similarly identifies the source of goods.
The non-functional features of a product's shape or packaging or a service's presentation is known as trade dress and is a type of trademark. These features can provide an total image or overall impression of a product or service that consumers can use to identify origin. For example, the U.S. Supreme Court specified the trade dress of a restaurant as:
A festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.
Two Pesos, Inc. v. Taco Cabana, Inc., 112 S. Ct. 2753. Trade dress can be registered and enforced in a manner similar to word or symbol marks.
Unlike patents and copyrights, the legal authority for trademarks is derived from the Commerce Clause of the Constitution rather than Article I, Section 8. As a result, trademark law is the result of common law (court decision precedents) that have been codified at both the federal and state level. The federal trademark statute is the Lanham Trademark Act of 1946, found at 15 U.S.C. Sections 1051, et seq. An example of a state trademark statute is the California Business and Professions Code Section 17200. Thus, trademarks can be registered with both federal and state agencies and trademark enforcement can be had in both federal and state courts.
The symbol ® appearing next to a trademark provides notice that the mark is federally-registered. There is no requirement to federally register a trademark, but there are certain advantages to doing so. For example, there is a presumption of validity for a federally-registered trademark. Also, there is a presumption that the registrant has the exclusive rights to use the mark throughout the US for the goods listed on the registration. Trademarks may also be registered in individual states. The symbol ™ appearing next to a mark indicates that it is intended as a trademark and serves to dissuade others from using that mark.
Copyrights
A copyright is a bundle of exclusive rights which exist for any original "expression" of an idea that is fixed in a physical medium, such as paper, film, or a compact disc. Copyrights are applicable to a wide variety of expressions including artwork, music and books. The exclusive rights include reproduction, creation of derivative works, distribution, public performance and public display.
As stated above, the legal authority for copyrights is derived from the U.S. Constitution, Article I, Section 8. The copyright statutes are contained in Title 17 of the United States Code. Copyrights may be registered with the Library of Congress, but this is not a requirement. A copyright must be registered, however, before it can be enforced in court. Further, if a copyright is registered prior to infringement, the infringer may be liable for statutory damages and attorney's fees.
It is no longer necessary to affix a copyright notice to a publication to maintain copyrights. However, a copyright notice may dissuade potential infringers and removes "innocent infringement" as a defense. A copyright notice begins with the word "Copyright" or the copyright symbol © followed by the year the work was first published and the name of the copyright holder.
Trade Secrets
A trade secret is any information that derives economic value from not being generally known to the public or those who can obtain economic value from its disclosure or use and that is reasonably safeguarded to maintain its secrecy. The term of a trade secret is indeterminate and may be perpetual. Examples of trade secrets are customer lists, business methods, manufacturing techniques, recipes and formulas, and pending patent applications.
Unlike patents, copyrights and trademarks, no overall federal legislation exists for protecting trade secrets. That is, trade secret law is governed by the law of individual states. Many states have adoped the Uniform Trade Secrets Act (UTSA), but each adopting state may have modified portions of the UTSA. Trade secret rights are typically enforced in state court under such legal theories as breach of contract, misappropriation, breach of fiduciary duty and unfair competition.
Trade secret rights are obtained and maintained through affirmative self-help. For example, access to confidential information should be controlled; employees, suppliers and vendors requiring access should sign nondisclosure agreements; sensitive material should be marked as confidential and kept under lock and key. Exiting employees represent the biggest risk for loss of trade secrets. As a result, some employers require new-hires to execute covenants not to compete, restricting future employment. The enforceability of these covenants is inconsistent among the various states, with some states viewing them as invalid. Hiring a competitor's employees is also risky, increasing potential liability for theft of trade secrets.