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If you’ve been following our Guide to Launching Your Business series, let’s see what you’ve accomplished thus far. You’ve written a solid business plan? You’ve come up with an inspiring business name? You’ve registered the business structure that provides you with the flexibility, liability protection and tax advantages you need? You’ve acquired the necessary federal and state tax ID numbers? If you answered all of these questions with a resounding YES, it’s time to put your marketing plan into action, right? Well, not quite.
Depending on the state you’ll operate your business from and your industry, there may be federal, state, and local licenses and/or permits you’ll need to obtain before you can officially open for business. We’ll take a look at the licenses and permits that are most often required.
Next, we’ll discuss how to use trademarks, patents, and copyrights to protect your unique business ideas. You put a lot of thought into choosing the ideal name for your business so you’ll want to protect it and any other intellectual property.
To ensure that your business is off to a good start, don’t overlook the importance of getting the licenses and permits required for your location and industry. You don’t want to run afoul of the federal or local government. Doing so could have serious consequences and even lead to your business being shut down.
All businesses need some type of license or permit to operate legally. And, depending on the business’s location and the nature of the business (industry), some will need to apply for multiple licenses/permits. Because license and permit requirements vary from state to state and differ among industries, it’s not possible to provide an exhaustive list.
However, the following list should give you an idea of the types of licenses and permits that are most often required by federal and local governments. Keep in mind that not all listed will apply to your business. You’ll need to contact your state and local governments for the specific requirements for your business.
Intellectual property is defined as “a work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights and for which one may apply for a patent, copyright, trademark, etc.” Your intellectual property can include something you’ve invented, your catchy business name, or software you’ve developed.
Trademarks, copyrights, and patents protect different types of intellectual property. Whether you need to apply for a patent, copyright or trademark will depend on the type of intellectual property you need to protect. Let’s take a look at these three protection methods and discuss what each protects and what rights each bestows on the owner.
Copyright is the exclusive right given to the creator of a creative work to reproduce the work. The creative work may be in a literary, artistic or musical form. Copyright is intended to protect the original expression of an idea in the form of a creative work, but not the idea itself. For example, if you’ve developed a software program, the actual program is protected once it’s actually produced but not the idea of writing the program.
Copyright is a form of intellectual property law that protects both published and unpublished original works of authorship that are fixed in a tangible form of expression including:
Original works of authorship are works that are independently created by human authors and that involve at least a minimal amount of creativity. A work is considered to be “fixed” when it’s captured (either directly by the author or under the author’s authority) in a sufficiently permanent medium such that it can be perceived, reproduced, or communicated for more than a short period. In the United States, copyright protection begins from the time the original work of authorship is fixed.
Copyright doesn’t protect:
From the time the creative work is captured in a permanent medium (fixed), the copyright owner has the exclusive right to:
Although a work is considered to be copyright protected from the time it’s fixed in a tangible medium, it’s recommended (not mandatory for works of U.S. origin) that an author register his/her creative work with the U.S. Copyright Office. Before registering, check the copyright database to ensure that what you want to register isn’t infringing on something already registered. If you register online, it can take up to nine months for your claim to be resolved.
Applying the copyright symbol © or the word “Copyright” along with the author’s name, and the year will provide practical and legal benefits. Should copyright infringement occur, this extra step will enforce the exclusive rights of the author.
For works created on or after January 1, 1978, the copyright term is the life of the author/creator plus seventy years after the author’s death (or after the last surviving author’s death if a joint effort). For works made for hire and anonymous or pseudonymous works, the copyright term is 95 years from publication or 120 years from creation, whichever is shorter.
You’ve likely heard of this method of protecting intellectual property. You mail a copy of your written work to yourself via registered mail and leave the envelope unopened. This is supposed to establish that the material was in your possession since a particular time (the date on the registered mail). The concept is based on the notion that, if the written work were to be misused by a third party, the “poor man’s copyright” would establish a legally recognized date of possession. This date of possession would be before any date that the third party would try to present as proof.
It’s important to note that there is no provision in U.S. copyright law that gives any value to the poor man’s copyright as a substitute for registering a creative work with the U.S. Copyright Office.
If you’re confident that the business name (and catchy slogan?) you’ve chosen will resonate with your customers, grow with your business, and help build a strong company identity, you’ll want to prevent other businesses from using it.
If you’ve already registered your business structure with the appropriate agency, no other business within a certain area should be allowed to use your business name. However, there are instances (especially as it relates to corporations) where the waters get a bit murky. For absolute protection of your business name and slogan, you’ll need to file for a trademark.
According to the U.S. Patent & Trademark Office (USPTO), “A trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.” The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher, or on the product itself.
Although registering a trademark with the USPTO provides many benefits (see below), it’s not required. You can establish what’s called “common law” rights based solely on use of the mark in commerce. For example, let’s say you open a floral shop named “The Rose Garden” and your store’s display window and walls feature a unique motif of roses and angels. In this instance, you would use the letters “TM” next to the name (the method for indicating ownership when a mark is registered only within your state or not at all). If another local shop used the same name and motif, you could sue them for trademark infringement, even though you haven’t officially registered the name and motif.
After applying to register your trademark, you’ll have to wait a few months for your mark to be examined and any problems identified. After examination, there’s a 30-day waiting period during which other businesses are allowed to challenge your right to register the trademark.
A trademark protects the owner of a mark (name, logo, symbol, or phrase) by ensuring that the trademark owner has the exclusive legal right to use the mark to identify their goods or services. The trademark owner also has the legal right to give someone else permission to use their trademark in exchange for payment.
Trademarks are essential for building brand recognition. When you hear the name “Kleenex”, you immediately associate it with facial tissues. There may be other facial tissue brands but, because of the registered trademark symbol ®next to Kleenex’s brand name, none can call themselves Kleenex. If another company attempted to do so, Kleenex could go to court and seek an injunction – a court order preventing further infringing activity.
Trademark is primarily a protection of your brand, but not all aspects of your brand are automatically eligible for trademark protection. Trademarks must be distinctive. Using a particular color on your company letterhead and website, for instance, doesn’t mean that other businesses can’t use it, even if they directly compete with you.
You can keep other businesses in your industry from using your trademark, but not different industries. If you sell shoes under a particular name and another company sells tile under that same name, you have no legal recourse.
Unlike patents and copyrights, trademarks don’t expire after a set term. Trademark rights come from actual “use”. Therefore, a trademark can last forever as long as you continue to use the mark in commerce to indicate the source of goods and services. A trademark registration can also last forever as long as you file specific documents and pay fees at regular intervals.
Ingenious entrepreneur that you are, you’ve invented a new gadget and want to prevent others from exploiting it. A patent will give you the right to keep infringers from making, using, selling, or offering to sell your invention in the United States or importing your invention into the United States.
Patents protect the mechanisms, principles and components surrounding an entrepreneur’s ideas and are granted by the USPTO for new, useful and nonobvious inventions. U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions. If you want patent protection in other countries, you must apply for a patent in each of those countries.
The first step in knowing how to patent your invention is knowing if your invention is patentable. The USPTO issues three different kinds of patents: utility, design, and plant.
To qualify for a utility patent (the most common type), your invention must fall into one of the following categories:
In addition to fitting into one of the above categories, the invention must:
For design patents, the design must be novel, nonobvious, and nonfunctional. For example, a new shape for a vacuum cleaner or car part that doesn’t improve its functionality would qualify for a design patent.
Plants may qualify for a patent if they are both novel and nonobvious. Plant patents are issued less frequently than any other type of patent and are granted to someone who has invented or discovered and asexually reproduced a distinct and new variety of plant.
U.S. utility and plant patents are generally granted for 20 years from the date the patent application is filed; however, periodic fees are required to maintain the enforceability of the patent. A design patent is generally granted protection for 14 years from the date the design patent is granted.
To determine the specific licenses and permits that apply to your business and industry, visit your state and local government websites. Since some licenses and permits expire after a certain time, keep track of when you need to renew them. Renewal is often easier than reapplying.
When it comes to protecting your intellectual property, the methods discussed above are intended to protect your ideas and uphold your brand. You don’t want to invest copious amounts of time creating ideas and products only to have unscrupulous competitors infringe on your rights as the owner. You also don’t want there to be confusion in the marketplace resulting in your reputation being sullied by counterfeiters offering inferior goods.
More ways to protect your intellectual property:
If you’re confused about whether you need a copyright, trademark, or patent, consult an intellectual property attorney for guidance.
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