The Wealth Spa

Registration & Contracts: Formal Protection for Your Trademarks, Copyrights, and Trade Secrets

Posted on 01. Dec, 2008 by Elizabeth Potts Weinstein in Legal

When and how should you formally protect your intellectual property using registration and contracts?

For the Big Ideas that are most important to your business, you should be willing to spend some money obtaining higher levels of protection.  This includes the name of your business, the name(s) of your flagship products and services, the content of your highest value creative works, and your trade secrets.  Obtaining additional protection includes registering trademarks and copyrights, requiring Non-Disclosure and Non-Complete Agreements, and filing patent applications.

Filing a patent application is beyond the scope of this blog, since it does not apply to many small businesses.  For more information about filing a patent application, go to http://www.uspto.gov.

Copyright Registration

To protect your creative works, writings, recordings, and video, you can register the work with the United States Copyright Office or the copyright office in your country.  The U.S. application process to protect written works is simple, requiring you to file out a few forms, pay a $45 fee for online filing, and file a copy of the creative work.  You usually do not need an attorney, unless the work is in a unique form.  

Why would you want to register a Copyright?  

• You cannot sue someone for infringement until you have registered the Copyright on your work.  If it is likely you will need to sue, file the application now.
• Registering shifts the burden of proof.  The person who is infringing you has to prove that you should not have a copyright, instead of the other way around.  
• You may obtain statutory damages and attorney’s fees if you prevail in a lawsuit.
• Your date of creation is recorded with the government.  Now, if you are challenged, your date of creation is not just your word; you have a government document as evidence.
• If you want international protection, you should register in the U.S. and not just rely upon using the © symbol.  Some countries do not have automatic right — you only get protection if you have registered.  The U.S. has various treaties with most other countries to honor each other’s copyrights, but in some cases, it only applies to registered copyrights.  

Copyright applications should be filed, if possible, within 3 months of the date of creation to get the protection of a host of default rules.  

Generally, you want to register a copyright for only your important works.  Not every article or blog post — that would become expensive and an administrative nightmare (you can file copyright registration applications for a set or collection of works, such as for 50 articles or blog posts).   Frankly, much of what you write is not worth that much by itself; you are not likely to go to Europe and start suing website owners just for copying one blog post.  

You want to register your high-value works, such as books, E-books, viral articles, and home study courses.  The more important it is and the easier to copy (electronic), then the more likely you will want the protection of registration.  If even a short article contains the very core ideas of your business, you may want to protect it via registering the copyright.

Get forms and additional instructions at the U.S. Copyright Office at http://www.copyright.gov.  

Trademark Registration

To protect words and symbols you use to identify the source of a product or service, you can file an application to obtain a U.S. federal trademark (or a substantially similar process in your country).  Trademark applications cost hundreds of dollars to file even without an attorney, so you don’t necessarily want to file an application for every word or phrase that you use.  Also, these applications are not automatically approved.   They are examined by the U.S. Patent and Trademark Office and you may have to respond to more than one Office Action arguing whether you have a valid trademark.  You may want to see the assistance of an attorney to help you navigate this process.   

Get forms and additional instructions at the U.S. Patent and Trademark Office at http://www.uspto.gov. 

Why would you want to register your trademark?

Similar to copyright registration, when you register your trademark you are staking your claim over the date you started using this mark in commerce.  This shifts the burden to the other side that must prove you don’t have a valid trademark, if they want to defend themselves in a lawsuit.  Five years after your trademark issues you are presumed to have a valid trademark and it becomes even more difficult for someone else to challenge the validity of your trademark.

By registering, you are also notifying the world that you are using your mark in commerce. Someone local may know about your unregistered trademark just by seeing your building or advertisement, but you are also notifying people on the other side of the country and world whom have never heard of you.  This means that you can obtain more damages in a lawsuit and it is easier to stop someone from using your mark.

Registering your trademark also offers international protections.  The U.S. has treaties with other countries, such that each other’s trademarks are enforceable in each other’s countries.  But in some of those countries, it only applies if the trademark is registered in that country or a country with which they have signed a treaty.  If you are doing business over the web and/or internationally, then you want to register your most important trademarks.  

Contracts

When do you need a Non-Disclosure or Non-Compete Agreement?

If you have information that you use in the course of your business that is secret and derives value for you because it is secret, then you may have a trade secret.  You protect your confidential information and trade secrets by entering into agreements with people who will have access to that secret information, so they are required to keep it secret.

People who may have access to your information include employees, partners, joint venture partners, consultants, independent contractors, and vendors.  You will want to enter into a Non-Disclosure Agreement with employees, independent contractors, and businesses so they are not allowed to disclose or use your confidential information, except as provided in the contract.  

This Agreement may just be part of the contract you are already using or may be a separate agreement.  Either way, if you do not use such an agreement, you will probably lose the ability to protect your trade secrets — because someone has access to the information but is under no duty to keep it secret.  They could put it up on the internet and there may be nothing you could do.

If you want to protect your client list from your employees, contractors, and partners, you may want to enter into a Non-Compete Agreement with them.  This Agreement states that they are not allowed to compete with you in a certain place, for a certain time, effectively meaning that even if they have your client list and service methods, they can’t use them.  These Non-Compete Agreements are not valid in some places (such as California), and in many jurisdictions must be limited to a reasonable place and time, such as limited to 100 miles from your location and 1 year in duration.  

This article is an excerpt from Grow Up! Strategies: The 7 Legal & Financial Strategies You Need to Up-Level Your Small Business (2008).  

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Tags: contracts, copyright, copyright registration, Intellectual Property, non-compete, non-disclosure, registering trademarks, registration, trade secret, trademark, trademarks and copyrights, writing