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Introduction
First Step: Documenting the Idea
Second Step: Identifying Areas of Possible Protection
Third Step: Avoiding Loss of Rights and Protecting Your Rights
Fourth Step: Avoiding Infringing the Rights of Others
Fifth Step: Identifying Ownership; Co-ownership; Co-inventor; Co-author and Joint Venture Problems
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In my thirty plus years as a patent attorney, on the average I think I am asked this question almost on a daily basis. It comes up so frequently, is so basic, and is of sufficient importance that we will devote this entire Chapter II in trying to answer this effectively in a step-by-step analysis.
A reasonably complete answer to this question (i.e. "I have a new idea; what should I do") overlaps into all four major areas of intellectual property law (i.e. patents, trademarks, copyrights and trade secrets). Most all of what appears in this Chapter II is also presented in other sections of the book. However, in spite of this redundancy, I think it is important to bring the loose ends that bear directly on this question together in one place and in a format designed to answer this question specifically, so that you can get a reasonably complete answer to this question without having to read the entire book.
NOTE: While the format of this checklist of questions is presented in the framework of an individual with an idea, this analysis applies just as well to small businesses or a large corporation which has come up with a new idea for its product line, or a manufacturing process, etc.
The person with the new idea (or the company which is planning to implement a new idea in the product line) is usually concerned mainly about three things:
- proper steps are taken to protect the idea;
- someone else doesn’t "steal" the idea;
- there are no infringement problems.
Ideally, a person with a new idea should immediately consult a patent specialist. However, many times the person will delay seeing a patent attorney for a number of months, either because he doesn’t want to incur the expense, or possibly because he wants to develop the idea further before he gives it any more exposure. In the meantime, valuable rights may be lost. Even though the person (or company) does not want to immediately consult a patent attorney, there are a few things which should immediately be done or considered. This Chapter II deals with these issues in a question and diagnosis format.
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- Have you prepared a written description of your concept? If so, have you signed and dated each page of that description as the originator? Also, have you had one or more witnesses who are not co-inventors or contributors to the idea sign and date each page of the description?
DIAGNOSIS: There are basically four ways to protect a new idea, namely: patents, trademarks, copyrights and trade secrets. Probably the majority of new worthwhile ideas have the possibility of being protected by a patent. The first step in protecting a patentable idea is to document the conception by a written disclosure properly signed and dated (as of the date of signing) by the inventor and signed and dated by one or more witnesses. A witnessing signature with the date is absolutely necessary. This documentation of conception is not the same as patent protection, but in a priority contest, this documentation can be critical. Also, any further development work should be similarly documented.
PRACTICAL ADVICE - If you are an attorney with a client who has not yet prepared a written description, sometimes you can simply ask him what the idea is, dictate a short description, have it typed up while you are completing your interview, and then have the originator sign and date it. Then you can sign and date it as a witness.
As an example, let’s assume that the originator describes the new idea as follows:
"I designed a new board game, which I call ‘Football Computeramics.’ At the start, the opposing players program their game plan into the computer, and then it proceeds along the lines of a normal football game, with the football players being moved over the board in the form of lighted images that appear on the surface of the board. I’ve tried it out with the family, and they think it’s great. I want to sell it to a big company."
The brief verbal description given above would likely not be sufficiently complete to properly document what might be the actual invention (if it is in fact an invention), but at least this brief disclosure gives us enough information so that we can go to the next set of questions. By all means have even this brief description properly dated and witnessed immediately, but the originator should be encouraged to prepare a more complete description.
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The next step is to classify what forms of intellectual property might be applicable. As indicated previously, basically, the protection could fall into the following categories: Patents; Trademarks; Copyrights; Trade Secrets (including proprietary or confidential information); or some combinations of these.
Now we ask the following question to cover each of these areas:
(POSSIBLE PATENT PROTECTION). Does your concept include any of the following:
- a machine (any mechanical or electrical device or whatever that does any sort of operation);
- an article of manufacture (e.g. a tool, a kitchen implement, a container, a toy, a game, or any useful object;
- a process or method (e.g. a manufacturing process, a chemical process, a measuring or testing process, a method of treating a product, or any step or series of steps involving physical change or action);
- any composition of matter (e.g. a chemical compound, a food product, fertilizer);
- an ornamental object (e.g. a lamp base, jewelry, furniture, an article of clothing);
- a plant, living organism or animal (e.g. a microbe to clean up oil spills or a genetically engineered rat used in medical research);
- a computer program?
DIAGNOSIS: If the item falls into any one of these categories, this would be the type of thing which would be patentable, provided it meets other requirements, such as being sufficiently "unobvious".
 To relate this to our example of the computerized football game, games are obviously within the scope of patentable subject matter. For example the game "Monopoly" was patented many years ago. Further, there may be patentable subject matter in the computer program and also the interaction of the computer with the components of the game.
CAUTION Don’t get too narrow minded about the kinds of things that could be patentable. It can be pretty broad. U.S. Patent 4,022,227, issued May l0, l977, is on a method of combing your hair to cover-up baldness. Look at the Smith patent cover page on the right. Other examples of different types of patents are given at the end of Chapter 3.
(POSSIBLE TRADEMARK PROTECTION). Does your idea utilize, or is it associated with, anything that might be considered a trademark or a service mark, such as a word or group of words (KODAK, APPLE, WHEATIES) pictorial representations, symbols, numbers, letters, sounds, scents, slogans, logo, color configuration, character marks, distinctive packaging, or any "device" or item which might serve to identify your product or services?
DIAGNOSIS: If yes, these types of things can function as a trademark and consideration should be given to federally registering the trademark. In the above example, the term "Football Computeramics" could likely function as a trademark. Further, there may be some other symbols, logos, slogans or pictorial representations which might warrant investigation as being protectable as trademarks. The term "Monopoly" is a trademark (subject to some attack on it, however). "Scrabble" is another example.
(POSSIBLE COPYRIGHT PROTECTION). Does the idea incorporate any of the following:
- anything in the fine arts, including literary works; musical works; dramatic compositions;
- paintings; drawings; sculptures; photographs; motion pictures; stage presentations; television programs; cartographic work; choreographic work; pantomimic work;
- anything in the applied arts, including jewelry; toys; fabric designs; even embellishments of a nonfunctional nature (e.g. as embodied in furniture, appliances and other industrial products);
- personal works including private letters, notes taken in attending a class, etc.;
- business documents and materials, including directories; manuals; instructions; specifications; memoranda; reports; studies; recorded presentations; advertising and promotional material; displays; artistic packaging;
- engineering and scientific works including architectural drawings; technical drawings; schematics; layouts; models; a compilation of facts, figures or data;
- computer programs and data bases;
- architectural works, including a building, architectural plans and drawings?
DIAGNOSIS: All of the above items are the types of things which are susceptible to copyright protection, provided there is some minimum amount of novelty and/or creative input.
It is almost impossible for a business to exist without producing some kind of copyrighted material. Further, under the new copyright law which came into effect in l978, the instant you put your work into any tangible form, such as writing it on paper or recording it in a dictating machine, that work becomes federally protected by the copyright law. In other words, you have the protection whether you know it or not.
In our example of the computerized football game, there would be a number of items subject to copyright protection. First, there is the layout of the game board itself (provided it has any sort of artistic input); instructions for the game; possibly artwork on the packaging. Further, the computer program would certainly be copyrightable.
(TRADE SECRETS AND PROPRIETARY INFORMATION). Does the idea incorporate any information or material which might be considered confidential or secret, such as any manufacturing process, formula, design information, tolerances, sources of supply, customer lists, price lists, or any business or technical information which might be considered confidential?
DIAGNOSIS: All of these are types of things which might be protectable as a trade secret. It is almost impossible for any business to exist without having some sort of confidential material which should be maintained as a trade secret.
With regard to our "Football Computeramics", since the game is not out on the market and has not yet been publicly disclosed, it would be protectable as confidential information, which in a broad sense can be considered a trade secret. Thus, if the concept of the game is disclosed to some prospective licensee or manufacturer on a confidential basis, there would be the obligations of confidentiality.
Many companies will refuse to take information such as this on a confidential basis, because of the problems that arise when the material disclosed is quite similar to information already available to that company.
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The next step is to go through the four main categories to see if you are in danger of jeopardizing any intellectual property rights, and also seeing that the appropriate steps are taken to protect the idea.
(PATENTS). If the answer to Question No. 2 concerning possible patentable subject matter is "yes", you should make sure the proper documentation discussed in QUESTION NO. l is done and then ask the following:
- Have you sold or offered for sale any product or items incorporating your idea?
- Have you used it commercially?
- Has there been any publication or uncontrolled disclosure of the concept?
- If you haven’t done any of these, are you planning to do so?
DIAGNOSIS: To obtain a valid U.S. Patent, the U.S. Patent application must be on file in the U.S. Patent and Trademark Office within one year of any sale, offer for sale, or commercial use of the invention in the United States, and also within one year of any publication of the invention anywhere in the world. Further, public disclosure of the invention even one day before the filing date of the U.S. application could mean irretrievable loss of substantial foreign patent rights. The client may be running out of the one year grace period, or there may be an impending publication or public disclosure that would jeopardize foreign rights.
HORROR STORY: Sometimes a client will tell me the following, "I showed my product at a tradeshow in Las Vegas last week, and it was really a hit. There were a lot of foreign distributors interested in it. I want to be protected all over the world." Unfortunately, prior to this time the client had not even thought of patenting the concept, and while he still may be able to file a valid U.S. application, quite possibly valuable foreign rights have been irretrievably lost
QUESTION NO. 7 (TRADEMARKS). If in answer to Question No. 3 you have identified any items connected with your concept that might function as a trademark, have any of these potential trademarks been put into use? Have you filed an application for federal registration of your mark?
DIAGNOSIS: When you begin using a trademark in connection with the sale or distribution of your goods, or possibly in connection with offering a service, you will automatically have established certain common law trademark rights (subject, of course, to preexisting rights of others). Beyond this, however, you could substantially enhance your rights by filing an application for a federal registration.
In November l989, there was a basic change in the U.S. Trademark Law which made it possible to file an application for federal registration merely on the basis of intent to use. As soon as the application is filed, this establishes constructive use of the mark throughout the United States and would give you preemptive rights in all states of the union, except as to the prior rights of others. This is subject, however, to later actual use of the mark and registration.
NOTE: Writing down your idea for a trademark and having it witnessed helps with regard to patent protection, but gives no protection for trademark rights.
(COPYRIGHTS). If in answer to Question 4 you find your concept involves any copyrightable subject matter, have you considered the benefits of federally registering your copyright?
DIAGNOSIS: As indicated before, under the copyright law which became effective in l978, you will automatically have copyright protection simply by placing the work in any tangible form, such as writing it down, recording it on video or audio tape, etc. Beyond this there are substantial benefits in federally registering your copyright. This is not a prolonged procedure, and it involves only completing and filing a short copyright form. It is necessary to register the copyright for a lawsuit to be brought to enforce the rights. Further, if the copyright is registered prior to an infringement, attorney’s fees may be available, and also certain specified statutory damages, thus avoiding the need of proving actual damages.
NOTE: As of March l989, you don’t even need the copyright notice on the published work to preserve the copyright. However, it is advisable to add the copyright notice, and this can be done without registering the copyright. (See Protecting Copyright Material, Chapter V, for information on the copyright notice.)
(TRADE SECRETS). If in answer to Question No. 5 you have identified information that is proprietary or a trade secret, have you taken steps to maintain its proprietary nature?
DIAGNOSIS: The law will normally protect an item as a trade secret if it has the following:
- it has some degree of secrecy to begin with;
- it is capable of being maintained as a trade secret;
- reasonable precautions are taken to maintain its secrecy.
It is important to note that the protection afforded the trade secret is in general directly proportional to the efforts taken in protecting its secrecy. The steps to be taken can include establishing appropriate company procedures, employee agreements (sometimes non-compete agreements with key employees), properly marking material as proprietary, monitoring outgoing publications, etc. Further, if you are disclosing your idea to another party on a confidential basis, this should be covered by a proper written agreement, protecting the rights of each party.
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In addition to protecting your own rights, there is also the concern of avoiding infringement of the rights of another.
(PATENTS). If you are making a substantial commitment in time or money in designing your product or planning a manufacturing process or investing in any sort of item which might be susceptible to patent protection, have you contacted a patent attorney to conduct a patent infringement study?
DIAGNOSIS: When a patent infringement problem is detected, there are several options, namely:
- examine the patent more closely to see if in fact it is valid or does cover your product;
- redesign to avoid infringement;
- seek a license from the patent holder;
- drop the project if the patent problem cannot be resolved.
Early identification is the key. If the design is in the early stages, sometimes a design change can be made quite easily on the drafting board to avoid the problem. Further, if you are not committed to the project, you are in a much better position to negotiate a license agreement.
 EXAMPLE: When Boeing was designing its 727 airplane a patent search uncovered a patent (U.S. 2,863,620) that covered the proposed Boeing design. However, this happened early in the design stage, and Boeing was able to negotiate a reasonable license. Look at the Vautier patent cover page on the right.
CAUTION: An infringement study should not be confused with a patentability search. A patentability search might disclose that the item is indeed patentable, but it still could infringe an earlier patent. An infringement study is usually more lengthy and involves analyzing the claims of potentially relevant patents. It is often advisable to conduct an infringement study if there is to be a substantial commitment to the project, particularly where it is in a newly emerging technology or where features of the product of another are being copied.
(TRADEMARKS). If you are planning to adopt a trademark, have you had a search conducted not only of the federally registered trademarks and applications for federal registration, but also state trademark registrations, tradenames (including corporate names) and common law trademarks that might not be registered?
DIAGNOSIS: There are qualified searching agencies which will conduct a fairly thorough trademark search in the United States in a price range from $200 to $400. A competent trademark specialist should be employed to evaluate the results of the search. As with potential patent infringement, early identification of a potential infringement problem is important.
(COPYRIGHTS). Have you copied or derived any inputs from material or information of another which might be susceptible to copyright protection?
DIAGNOSIS: With the new copyright law which became effective on March l, l989, a copyrightable work published after that date is still afforded protection even though there is no copyright notice on the published material. Material published from l978 to March l, l989 would normally require the copyright notice, but there are certain circumstances where the notice could be omitted for a period of time without invalidating the copyright. The point is that even though the copyright notice is not on the material which you are copying, there could still be an infringement.
On the bright side, copyright protection is different from patent protection in that to infringe, you would have to be copying or somehow appropriating the work of another. If the work is your own independent creation, without any access to someone else’s work, there would be no copyright infringement, even though it turns out that your work could be quite similar to someone else’s earlier work. For example you could develop a computer program entirely on your own, and it could turn out that this was identical to a computer program developed by another party at an earlier time. However, if there was no copying, there could be no copyright infringement.
CAUTION: However, if the computer program is subject to patent protection, there could be patent infringement.
(TRADE SECRET). Is there any possibility that you are incorporating in your product or company operation any of the information or material that might have been derived from another under circumstances where that information could be considered as a trade secret or confidential? Also, is it possible that an employee of yours or someone else associated with you could be doing so?
DIAGNOSIS: If you buy a person’s product on the open market and reverse engineer it, this is a quite legitimate way to derive information about another’s product. On the other hand, if improper means are used, this could be a trade secret violation. Trade secrets are most commonly lost by employees transferring from one job to another. You should be careful that you are not inadvertently getting into a situation where you could be violating the confidentiality or trade-secret rights of another company through a former employee of that company.
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Is there any other person who might have some involvement in your concept? For example, if this is a potentially patentable concept, is there anyone else who made any suggestions or cooperated with you in developing the concept in any way other than doing routine mechanical or clerical tasks? Or if this is a work subject to copyright protection, has anyone else had any input in creating any of the copyrightable subject matter? Has there been any other type of involvement of this general sort? Or have you either by agreement or possibly by an understanding given anyone a portion of the rights in your concept or a "share of the action"?
DIAGNOSIS: If yes, you should be aware that there are any number of pitfalls regarding co-ownership, co-inventorship and co-authorship of intellectual property. These sort of concerns are generally manageable if identified at an early time. However, any number of promising ventures are torpedoed by misunderstandings or conflicts arising among the co-owners. (See the two "HORROR STORIES", of Chapter I.)
If there are two co-owners of the patent, unless there is an agreement to the contrary, each of the co-owners can make, use or sell the invention, or license rights in the same, without the permission of the other owner, and without accounting to the other owner for any of the profits. This can be disastrous.
Further, in a copyrighted work, absent an agreement to the contrary, each copyright owner can use the copyrighted material in most any way. However, this is subject to the right of accounting to the other co-owner for the profits, and is therefore not as severe as in the case of co-ownership in patents.
The above examination is intended merely to raise some of the more obvious "red flags" relative to a new concept. The next step would be, of course, to consult a specialist dealing in those areas which your examination indicates might be of concern.
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